“Everyone is growing.” At the end of 2019, this was the World Bank’s outlook of the economic trajectory for the year 2020. The global economy was steadily growing and strengthening, and only a select few countries were facing GDP and economic contractions. Here is a look at the countries that experienced economic growth in 2020.
COVID-19’s Impact on the Economy
At the end of 2020, the World Bank sang a much different tune than what it did at the end of 2019. After the onset of a global pandemic, the majority of the world’s economies have taken a turn for the worst, the year turning out to be one of the worst in terms of economic growth and development. A far cry from the projected global GDP growth of 2.5%, as in June 2020, the International Monetary Fund (IMF) predicted that the world would close out the year with a GDP growth rate of -4.9%.
For some countries such as Spain, the U.K. and Tunisia, economic growth in 2020 had already fallen by around 20% by the year’s second quarter compared to the same period of 2019, a record quarterly fall for many countries. In other countries such as Taiwan, Finland, Lithuania and South Korea, the economic impact was much less than 5% contractions in GDP.
However, while the problem of economic recession was common for most nations, there were a select few that were not only able to ward off a negative growth pattern but steadily grew in the face of a global crisis. According to reports from the International Monetary Fund (IMF), in October 2020, only 16 countries would sustain economic growth in 2020 of more than 1%, and 11 would grow at a rate between zero and 1%. That leaves a whopping 167 nations facing economic contraction.
5 Countries that Experienced the Highest Economic Growth in 2020
- Guyana: Guyana currently has the fastest growing economy globally, with an economic growth rate of approximately 26.21% in 2020. The mainland country serves as home to one of the most promising newly discovered oil basins globally and a vast supply of other natural resources. The recent oil discoveries and new production began in late 2019. Guyana’s economy is expanding fast and expects the GDP to more than double by 2025. Therefore, while it is likely that the Guyanese economy did face setbacks due to the COVID-19 pandemic, the explosion of its oil industry has been able to keep the country’s economy heading in the right direction.
2. South Sudan: After facing stunted economic growth in the 2010s due to civil unrest, the relatively newly independent South Sudan faced harsh humanitarian and food insecurity crises. However, in 2018, the country signed a new peace agreement, followed by the reopening of many of its oil wells, boosting its main revenue source. Between 2018 and 2019, the country gradually maneuvered itself back into a steady growth pattern that maintained a 4.11% growth in GDP in 2020.
3. Bangladesh: Over the years 2016 to 2020, the Bangladesh economy has recorded a 7.6% growth in GDP. Such rapid expansion has allowed the country to graduate from the U.N.’s list of Least Developed Countries (LDC). Because of its now stable macroeconomic environment, buoyant domestic demand and export-oriented industry-led growth, Bangladesh has been able to maintain an approximate 5.2% growth rate during 2020, with predictions that it will see an increasing growth rate of 6.8% in 2021 and the coming years.
4. Egypt: Similar to Guyana, the Egyptian economy has recently benefitted greatly from lucrative natural gas discoveries. Though the pandemic and global economic crisis hit the country’s economic growth in 2020 due to a sudden fall in tourism, remittances and exports, its previous main sources of income, the revenue from its oil discoveries, was enough to stabilize growth in the economy. Already, the Egyptian economy is on the path to recovery with a projected 2.76% growth in 2021, before returning to its previous growth levels averaging at 5.28% in the coming years.
5. Benin: Due to intentional and effective key economic and structural reforms in recent years, Benin reached a growth rate of 6.41% between the years 2017 and 2019. Therefore, while economic activity did slow for the country heavily dependent on re-export and transit trade, it was able to sustain economic growth in 2020 at a rate of approximately 2%. As the world adapts to and moves towards the end of the pandemic and global economic crisis, expectations have determined that Benin’s economy will return to faster growth rates of around 5% to 7% in the upcoming years.
It was low- and middle-income emerging economies that were better able to sustain a growth trajectory throughout the 2020 global economic crisis. In fact, China, which the COVID-19 pandemic hit first, has been the only trillion-dollar economy that sustained positive economic growth in 2020. Economic growth is crucial for reducing and eradicating poverty and can lead to social improvements in affected countries. Therefore, the hope is that the countries that are not on the above list will return to pre-pandemic growth rates, and the five fastest-growing nations of 2020 keep developing at this level.
– Rebecca Harris