THESE ARE THE WORLD’S MOST MISERABLE ECONOMIES
Venezuela, South Africa seen as world’s unhappiest economies.
Thailand, Singapore remain ‘least miserable’ in rankings.
Rising prices are
more of a threat to the global economy this year than joblessness, according to
Bloomberg’s Misery Index, which sums inflation and unemployment outlooks for 66
economies.
Venezuela marks its
fourth year as the world’s most miserable economy, with a score that’s more
than three times what it was in 2017. Thailand again claimed, “least miserable”
status, though the nation’s unique way of calculating unemployment makes No. 2
Singapore worth noting. Elsewhere, Mexico looks to make big strides this year
as inflation becomes more manageable, while Romania absorbs more misery for the
opposite reason.
The Bloomberg Misery
Index relies on the age-old concept that low inflation and unemployment
generally illustrate how good an economy’s residents should feel. Sometimes, of
course, a low tally can be misleading in either category: Persistently low
prices can be a sign of poor demand, and too-low joblessness shackles workers
who want to switch to better jobs, for instance.
The results largely
signal a global economic outlook that remains bright overall: Economists are
penciling in 3.7 percent year-on-year growth for the world in 2018, matching
last year’s pace that was the best since 2011, according to the Bloomberg
survey median.
Some have not been
so fortunate. In Venezuela, hyperinflation has left many economists throwing up
their hands at the actual rate of price growth. Black-market currency rates
have provided an angle on the numbers, while alternative measures have chased
daily cost swings. A recent government slashing of grocery prices gave a brief
reprieve to inflation, while the surveyed economists see it rising 1,864
percent this year.
It’s anyone’s guess:
The International Monetary Fund’s latest estimate has that figure at 13,000
percent for this year after about 2,400 percent in 2017.
Romania also is
heading in the wrong direction. Economists see a 3.3 percent inflation rate for
2018 after much more subdued price growth last year, pushing its misery down 16
notches, to No. 34. The National Bank of Romania is chasing inflation with
interest-rate hikes, aiming to stay ahead of any overheating while growth
surges on ballooning government spending.
At the other end of
the spectrum, Mexico makes the biggest progress this year, moving 16 notches
toward “least miserable” as economists remain optimistic that the central bank
will be able to tame last year’s bout of high inflation, bringing it to an
average 4.1 percent this year after 6 percent in 2017. Unemployment is set to
remain around 3.4 percent.
Two caveats here:
Mexico’s jobless figures don’t take into account the 60 percent or so of workers
who are in the informal economy. And despite this year’s improvement, consumer
confidence remains in a funk and Nafta negotiations might not see a happy
ending.
Some other notable
mentions:
=>Malaysia moves down
the misery scale to No. 52 from No. 43 due to moderating inflation. The tepid
price growth is allowing Bank Negara Malaysia to be patient with interest-rate
hikes, even as they were first in the region this year to tighten this year.
=>Argentina, ranked at
No. 3, belies a third year of improvement in its overall score, set to be the
lowest since at least 2013, the year in which the IMF censured the country for
covering up high inflation and when Bloomberg began calculating the data.
=>South Korea and
Norway, which also happened to perform well in the Bloomberg 2018 Innovation
Index at Nos. 1 and 15, broke into the top-10 least miserable.
=>Saudi Arabia,
projected to make the biggest plunge from 2017 in its misery index number,
climbs into the top 10 most-miserable economies.
=>The U.S. will see
its misery score improve to 6.2 this year from 6.5 in 2017 even as inflation
rises following years of persistently low price gains, and as the labor market
continues to tighten.
=>China, the world’s
second-largest economy, saw its misery score rise to 6.3 this year from 5.5 in
2017. Consumer prices are estimated to rise 2.3 percent this year, compared
with 1.6 percent in 2017.
=>Asian economies are fortunate to escape the top
10 most miserable this year, which are otherwise geographically diverse with
Europe, Latin America , and Africa almost equally represented
SOURCE: ONLINE
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