Which countries’ economy performed better in 2024?

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However, as always, this rosy global picture varies widely and covertly between countries. To assess these differences, The Economist compiled data on five economic and financial indicators—gross domestic product, stock market performance, headline inflation, unemployment, and government deficit—in 37 mostly wealthy countries. It then ranks each economy based on its performance to obtain a composite score. This ranking is shown in the table below.

Who are the winners?

This is the third year in a row that Mediterranean countries have topped The Economist’s ranking, with Spain topping the list this year. Greece and Italy, once symbols of the Eurozone’s problems, continue to recover. Ireland, which has attracted many tech companies, and Denmark, home to the pharmaceutical company behind the controversial but lucrative weight loss drug Ozmepic, round out the top 5. .

Meanwhile, the economic powerhouses of Northern Europe have been disappointed by the poor performance of Britain and Germany. The two Baltic teams Latvia and Estonia have placed themselves at the bottom of the table, a position that in They also won in 2022.

The first economist indicator of real GDP growth is widely regarded as the most reliable measure of the overall health of the economy. Global GDP has strengthened this year thanks to the resilient US economy and the strength of consumers in this country.

In Spain, annual GDP growth is on track to exceed 3 percent thanks to a strong labor market and high levels of immigration that mechanically boost economic output. Although the per capita GDP of this country has also increased, this amount has been lower than the GDP of the entire country.

In other countries, growth has been negligible. Germany and Italy have faced problems due to the high price of energy and the stagnation of manufacturing industries. Japan is expected to record a meager 0.2 percent growth due to weakness in tourism and the automotive industry. Hungary and Latvia are both in recession.

The economist’s second criterion is stock market returns. Investors have recovered from a tense August, when a weakening yen sparked fears of a crisis. US stocks delivered an impressive 24% inflation-adjusted return as already high valuations of tech companies rose. The Canadian market, which is closely related to its southern neighbor, also posted positive gains with strong performances in the energy and banking industries. Japan’s Nikkei 225 hit a record high, even if its overall annual performance was average. There are some losers among them. Stock prices in Finland remained in negative territory in real terms, and South Korea’s stock market fell following the country’s president’s attempted self-immolation on December 3.

The Economist next looks at core inflation, with volatile components such as energy and food removed, to accurately reflect price pressures. Although global inflation has decreased significantly, the price of services remains high in many countries. In the UK, wage growth continues to push up the cost of services, meaning headline inflation is rising uncomfortably. In Australia, rising housing costs are partly to blame for rising inflation. Inflation in Türkiye is still staggering. On the other hand, France and Switzerland have been able to control the price pressure.

hot job market

A classic indicator of economic misery is the increase in unemployment; A trend many have predicted since central banks started raising interest rates and AI became more sophisticated. However, despite some declines, labor markets remain strong and the unemployment rate is near record lows. Southern Europe, which still suffers from high unemployment, has seen significant improvement: unemployment in Greece, Italy and Spain has fallen to its lowest level in more than a decade. Italy has made the most progress with a 1.4% decrease in unemployment since the beginning of the year. In the United States and Canada, where the unemployment rate has slightly increased, the rising unemployment rate is largely attributed to people returning to the labor market and high levels of immigration.

The economist’s final measure looks at financial balances, excluding interest payments, as a share of GDP. After years of massive spending, consolidation is needed in many countries to ensure that the debt burden remains manageable. Denmark and Portugal stand out for achieving budget surpluses through fiscal discipline. Norway and Ireland also boast budget surpluses, albeit for different reasons: Norway due to high oil revenues and Ireland due to a corporate tax windfall, boosted by tech giant Apple’s multi-billion dollar back tax payment.

However, most governments continue to spend without worrying about the consequences. Poland’s initial deficit exceeded 3 percent of GDP due to increased defense spending in response to Russia’s war in Ukraine. In Japan, heavy fiscal stimulus, aimed at propping up the economy and easing cost-of-living pressures as the era of ultra-low interest rates ends, has exacerbated debt problems. Britain’s debt path is deteriorating and its latest budget to repair public finances failed. France is immersed in political chaos and is unable to control its expenses.

Now, on the eve of the beginning of 2025, the world economy is facing new challenges. Almost half of the world’s population lives in countries that held elections this year; Many of them chose leaders who could be called “unpredictable”. Global trade is under threat, government debt is rising, and stock markets have no room for error. For now, at least, Spain, Greece and Italy, long scorned by their northern neighbors as weak economies, can celebrate their economic resurgence. They deserve a celebration.