Some G20 Economies Are Experiencing High Inflation And Unemployment
The economic outlook for the advanced economies has improved dramatically as the vaccine rollout gathers steam and new coronavirus infection rates continue to decrease.
In addition, the massive monetary and fiscal policy stimulus supporting the US economy during the pandemic has also been working its magic. US President Joe Biden’s Administration’s impressive US$1.9 trillion stimulus program is boosting growth not only in the US but virtually across the entire world.
Because of the vaccines and the improving rollouts, economists have been raising their growth forecasts for the advanced economies, and of course, this has also been improving the outlook for world economic growth.
According to the IMF and many other forecasting groups, the two largest economies, the US and China, will be the key global growth locomotives over the next couple of years.
World real GDP is projected to rebound by about 6% this year and then moderate to about 4.4% in 2022. Of course, by historical standards, these strong two years of projected global growth may seem rapid, but within the context of the huge 3.3% pandemic-related decline in 2020, the numbers may not really go far enough.
It should be somewhat apparent from the following table that China’s economy experienced a relatively early rebound out of the pandemic recession. According to recent data, China’s real GDP was 18% higher in the first quarter of this year compared to the first quarter in 2020. China’s GDP is projected to increase 8.5% this year and by 5.2% in 2022.
In some contrast, the US economy barely grew in the first quarter of this year compared to a year earlier but is still expected to expand 6% this year and 3.7% in 2022.
The projected growth rates of the other large industrial countries are all positive for 2021 and 2022, but nowhere close to the pace of the recoveries in the US and China.
For example, Japan which possesses the third-largest economy is projected to grow only 2.2% this year and 2.9% in 2022. The next largest economy, Germany, is expected to record 3.5% growth this year and 4% in 2022.
India’s economy is expected to post a whopping 10.4% growth rebound this year and a further expansion of 5.2% in 2022. Once again, India experienced a massive 8% drop in real GDP in 2020.
Canada’s economy is projected to recover by 5.4% this year, also followed by above-average 4.2% growth in 2022.
A cursory glance at some of the relevant macro-economic data of the G20 group of countries highlights the conspicuous high inflation and high unemployment problems of several of them.
Indeed, the three countries currently experiencing the worst of surging inflation are Argentina (46%), Turkey (17.1%), and Brazil (6.8%). These same high inflation countries are also recording extremely high unemployment rates, 11% in Argentina, 13% in Turkey, and 14% in Brazil.
Economic Overview Of The G20 Countries - Output, Employment, And Inflation
(Click on image to enlarge)
Economic growth and inflation ARE NOT THE SAME THING!!!!! Reasonable and sustainable economic growth is fairly beneficial, while inflation is that cancer that steals the purchasing power of people's assets and savings, and incomes. For the vat majority of people, inflation does not raise their income to counter the inflation. That is only somewhat true for the rich and the very rich folks. Those with incomes that do not automaticly adjust for inflation,( the bottom 75% simply suffer.