Where Does Global Growth Come From?
Over 80% of GDP growth comes from just 16 countries.
Most investors know the story of the MINT and BRICS countries. These are emerging markets with rapidly expanding economies, and investors expect these countries to drive global growth both now and in the future.
However, keeping the above point in mind, we were interested in visualizing the actual growth that is occurring in the global economy. What part of it is derived from emerging markets, and what part is represented by the economies of developed nations?
In an analysis conducted by the Boston Consulting Group, about 52% of all global growth between 2014-2016 can be attributed just to China and the United States. While it is true that China may be slowing and American growth isn’t what it used to be, these two economies are still front and center because of their sheer size and impact.
In fact, it turns out there are only 16 countries worldwide that are adding 1% or more growth to the whole picture. Every country outside of this group, when added together, produces just a measly 18.5% of total growth.
How do the MINT and BRICS countries compare?
The MINT countries (Mexico, Indonesia, Nigeria, and Turkey) all make it onto our chart and are respectively contributing 1.6%, 2.2%, 1.3%, and 1.2% to global economic growth.
The BRICS countries (Brazil, Russia, India, China, and South Africa) are an older story. While China (30.3%) and India (6.5%) make up a considerable piece of the chart, the other countries have seen better times.
In particular, Russia has been struggling since oil prices collapsed, and the country is actually negatively impacting global growth by contracting -1.3% through 2016. Lastly, Brazil has flatlined and is contributing 0.0% to world economic growth in the same timeframe.
Originally posted on Visual Capitalist.