GDP Growth Rates

The top fastest growing countries over the next 10 years (above 25 MM):

This is the second in a three part series where we identify the most attractive international investment opportunities for the next ten years. We start out by looking at economic efficiency, i.e. the fundamental freedoms and legal framework, which facilitates successful investing. Second we look at growth rates and finally we look at places where economic opportunity will be taking place.

When you look at future growth rates, it is a function of economic freedom and GDP per capita. All other things equal, high economic freedom and low GDP per capita, both lead to high economic growth.

EconomyPolitics Methodology

Estimating next year’s GDP growth is hard to get right. To an investor looking to place capital, it is easy to confuse next year’s economic growth with long term potential. As we are no likelier than the next economist to “get it right” in the short term, we have chosen to focus on longer–term trends, i.e. the ten year growth rates, which in the end dominate.

We forecast how long it would take for a country to reach the prosperity level of the United States as measured by GDP per capita. If a country was free and open, they become on par to the United States in 40 years. After World War II, Europe was poor and destitute and its infrastructure was destroyed, but it was relatively free and open for business. Many of the more open ones caught up in terms of GDP per capita to the United States in about 40 years.

We use the 40 year as an anchor and assume that any country that is free and open will catch up in 40 years. The lower the GDP per capita, the faster the growth. We also make adjustmenst for economic efficiency and population growth.

So where are the places that will grow the most over the coming decade? Africa stands as a bright spot for growth. This is the second year that we have highlighted Africa as a continent of hope.

Rank	Country	Population	Efficiency      Score	GDP per cap	10 yr. growth
1	Rwanda	10,276,000	0.44	$900	10.52%
2	Uganda	33,888,000	0.35	$1,300	9.98%
3	Ghana	24,297,000	0.48	$1,500	9.84%
4	Zambia	13,148,000	0.47	$1,500	9.49%
5	Kenya	40,901,000	0.36	$1,600	8.98%
6	Kyrgyzstan	5,558,000	0.43	$2,100	8.54%
7	Madagascar	20,216,000	0.33	$1,000	8.38%
8	Ethiopia	81,764,000	0.66	$900	8.33%
9	Jordan	6,464,000	0.41	$5,300	8.23%
10	Georgia	4,371,000	0.44	$4,800	8.14%
11	Malawi	15,628,000	0.49	$900	8.13%
12	Mozambique	23,304,000	0.36	$900	7.98%
13	Tanzania	44,644,000	0.47	$1,400	7.81%
14	India	1,192,407,000	0.38	$3,400	7.77%
15	Vietnam	86,639,000	0.47	$3,100	7.76%
16	Bangladesh	165,498,000	0.51	$1,600	7.73%
17	Mongolia	2,711,000	0.49	$3,300	7.63%
18	Philippines	94,062,000	0.33	$3,500	7.44%
19	Indonesia	234,100,000	0.39	$4,300	7.31%
20	Burkina Faso	16,247,000	0.58	$1,200	7.13%
21	Thailand	63,795,000	0.64	$8,700	7.11%
22	Pakistan	171,576,000	0.44	$2,600	7.03%
23	Mali	14,913,000	0.58	$1,200	6.92%
24	Nicaragua	5,848,000	0.46	$2,900	6.91%
25	Peru	29,499,000	0.42	$9,200	6.87%
26	Morocco	32,146,000	0.55	$4,900	6.79%
27	Guatemala	14,323,000	0.29	$5,200	6.78%
28	El Salvador	6,267,000	0.48	$7,300	6.76%
29	Moldova	3,564,000	0.56	$2,300	6.66%
30	China	1,343,099,000	0.48	$7,400	6.66%
31	Paraguay	6,501,000	0.59	$4,900	6.65%
32	Honduras	7,617,000	0.65	$4,200	6.57%
33	Senegal	12,857,000	0.53	$1,600	6.56%
34	Egypt	78,901,000	0.36	$6,200	6.55%
35	Armenia	3,228,000	0.37	$5,800	6.51%
36	Sri Lanka	20,428,000	0.63	$4,900	6.37%
37	Chile	17,160,000	0.49	$15,500	6.27%
38	Namibia	2,192,000	0.42	$6,900	6.23%
39	Benin	9,204,000	0.37	$1,500	6.11%
40	Nigeria	157,870,000	0.55	$2,400	6.06%
41	Colombia	45,859,000	0.63	$9,800	6.01%
42	Tunisia	10,430,000	0.31	$9,500	5.86%
43	Malaysia	28,799,000	0.56	$14,700	5.86%
44	South Africa	49,730,000	0.56	$10,700	5.81%
45	Nepal	29,947,000	0.66	$1,200	5.77%
46	Panama	3,507,000	0.52	$12,700	5.55%
47	Mauritius	1,298,000	0.61	$13,500	5.48%
48	Albania	3,187,000	0.54	$8,000	5.46%
49	Mexico	108,777,000	0.30	$13,800	5.37%
50	Costa Rica	4,643,000	0.56	$11,400	5.23%
51	Turkey	72,239,000	0.31	$12,300	5.21%
52	Macedonia	2,054,000	0.51	$9,400	5.19%
53	Jamaica	2,740,000	0.50	$8,400	5.04%
54	Côte d'Ivoire	21,530,000	0.73	$1,700	4.97%
55	Oman	2,936,000	0.77	$25,800	4.94%
56	Lesotho	2,070,000	0.55	$1,700	4.92%
57	Cameroon	19,955,000	0.67	$2,300	4.86%
58	Botswana	1,978,000	0.61	$13,100	4.84%
59	New Zealand	4,358,000	0.42	$28,000	4.75%
60	Brazil	194,553,000	0.60	$10,900	4.70%
61	Bolivia	10,015,000	0.24	$4,800	4.67%
62	Azerbaijan	8,961,000	0.51	$11,000	4.63%
63	Kazakhstan	15,835,000	0.28	$12,500	4.51%
64	Romania	21,469,000	0.60	$11,500	4.41%
65	Cyprus	798,000	0.55	$21,000	4.39%
66	Lithuania	3,340,000	0.34	$15,900	4.36%
67	United Arab Emirates	4,775,000	0.07	$40,200	4.32%
68	Dominican Republic	10,241,000	0.80	$8,600	4.27%
69	Syria	22,386,000	0.85	$4,800	4.22%
70	Bosnia and Herzegovina	3,792,000	0.55	$6,600	4.19%
71	Uruguay	3,377,000	0.72	$13,600	4.18%
72	Bulgaria	7,545,000	0.59	$12,800	4.10%
73	Guyana	764,000	0.72	$6,800	4.10%
74	Mauritania	3,385,000	0.67	$2,100	3.97%
75	Estonia	1,332,000	0.48	$19,000	3.97%
76	Latvia	2,240,000	0.76	$14,500	3.96%
77	Burundi	8,589,000	0.73	$300	3.86%
78	Montenegro	618,000	0.65	$9,900	3.81%
79	Serbia	9,863,000	0.40	$11,000	3.77%
80	Israel	7,613,000	0.83	$29,500	3.68%
81	Slovakia	5,425,000	0.33	$22,200	3.54%
82	Poland	38,082,000	0.67	$18,800	3.48%
83	Hungary	10,006,000	0.87	$19,000	3.47%
84	Algeria	35,317,000	0.75	$7,400	3.45%
85	Portugal	10,660,000	0.16	$23,000	3.40%
86	Ecuador	14,229,000	0.87	$7,800	3.36%
87	Ukraine	45,712,000	0.41	$6,700	3.21%
88	Ireland	4,510,000	0.66	$37,600	3.10%
89	Australia	22,347,000	0.81	$41,300	3.09%
90	Canada	34,157,000	0.83	$39,600	3.07%
91	South Korea	48,463,000	0.66	$30,200	3.04%
92	Croatia	4,433,000	0.63	$17,500	3.01%
93	United Kingdom	61,807,000	0.35	$35,100	2.97%
94	Denmark	5,549,000	0.36	$37,000	2.88%
95	Czech Republic	10,468,000	0.68	$25,600	2.82%
96	Argentina	40,564,000	0.80	$15,000	2.80%
97	France	65,444,000	0.66	$33,300	2.78%
98	Russia	141,242,000	0.48	$15,900	2.75%
99	Iran	74,782,000	0.76	$11,200	2.75%
100	Finland	5,358,000	0.61	$35,300	2.74%
101	Kuwait	3,092,000	0.78	$51,700	2.73%
102	Bahrain	802,000	0.75	$40,400	2.55%
103	Hong Kong	7,046,000	0.50	$45,600	2.51%
104	Spain	46,014,000	0.87	$29,500	2.49%
105	Japan	127,381,000	0.50	$34,200	2.47%
106	Taiwan	23,125,000	0.53	$35,100	2.47%
107	Slovenia	2,049,000	0.85	$28,400	2.41%
108	Germany	81,850,000	0.37	$35,900	2.35%
109	Sweden	9,346,000	0.75	$39,000	2.34%
110	Netherlands	16,660,000	0.96	$40,500	2.29%
111	Switzerland	7,787,000	0.42	$42,900	2.28%
112	United States	310,874,000	0.70	$47,400	2.27%
113	Iceland	322,000	0.88	$38,400	2.19%
114	Belgium	10,766,000	0.37	$37,900	2.00%
115	Austria	8,360,000	0.65	$40,300	1.83%
116	Italy	60,188,000	0.80	$30,700	1.83%
117	Singapore	5,044,000	0.52	$62,200	1.57%
118	Greece	11,277,000	0.87	$30,200	1.53%
119	Chad	11,522,000	0.12	$1,600	1.25%
120	Angola	18,894,000	0.24	$8,700	1.22%
121	Venezuela	29,016,000	0.20	$12,600	1.17%
122	Zimbabwe	12,424,000	0.95	$100	1.06%
123	Norway	4,867,000	0.60	$59,100	0.70%
124	Luxembourg	499,000	0.83	$81,800	-0.07%

Regional Differences

The region that should grow fastest is Africa. We have projected the 10 year growth rate for Africa at 6.32%. Africa’s young population is growing fast, they are very poor and they are finally starting to end the cycle of war and replace it with a system of good governance. All those things increase GDP and bode well for economic growth.

Asia follows close behind. They come in at 5.92%. Their population is growing slower than Africa, and their standard of living is greater, but they also have a greater degree of economic efficiency.

Latin America follows at 5.32%. That number would be much higher were it not for Hugo Chavez and his circle of Social Autocrats in Venezuela, Ecuador, Bolivia and Argentina.

The Middle East came in a 5.04%. That number could surprise on the upside should the region’s recent turmoil blossom into good governance. But, the truth is no one knows the outcome of Egypt and the rest of the Arab world.

Oceania follows mostly because growth in Indonesia is pulling the rest of the countries up and finishes at 4.18%.

Europe’s expected growth is 3.12%, but it is a mishmash of the heavily indebted PIIGS which lower growth and Eastern Europe which raise growth.

North America’s expected growth comes in last place at 2.67%. However, the region is the least diverse (in number of countries). There are no undeveloped countries and, the population, while not as old as Europe’s, is not as young as Africa’s.

Regional Data

Africa average: 6.32%

Rank	Country	10 yr. growth
1	Rwanda	10.52%
2	Uganda	9.98%
3	Ghana	9.84%
4	Zambia	9.49%
5	Kenya	8.98%
7	Madagascar	8.38%
8	Ethiopia	8.33%
11	Malawi	8.13%
12	Mozambique	7.98%
13	Tanzania	7.81%
20	Burkina Faso	7.13%
23	Mali	6.92%
33	Senegal	6.56%
38	Namibia	6.23%
39	Benin	6.11%
40	Nigeria	6.06%
44	South Africa	5.81%
47	Mauritius	5.48%
54	Côte d'Ivoire	4.97%
56	Lesotho	4.92%
57	Cameroon	4.86%
58	Botswana	4.84%
74	Mauritania	3.97%
77	Burundi	3.86%
119	Chad	1.25%
120	Angola	1.22%
122	Zimbabwe	1.06%

Asia average: 5.92%

Rank	Country	10 yr. growth
6	Kyrgyzstan	8.54%
14	India	7.77%
15	Vietnam	7.76%
16	Bangladesh	7.73%
17	Mongolia	7.63%
18	Philippines	7.44%
21	Thailand	7.11%
22	Pakistan	7.03%
30	China	6.66%
36	Sri Lanka	6.37%
43	Malaysia	5.86%
45	Nepal	5.77%
63	Kazakhstan	4.51%
91	South Korea	3.04%
103	Hong Kong	2.51%
105	Japan	2.47%
106	Taiwan	2.47%

Latin America average: 5.16%

Rank	Country	10 yr. growth
24	Nicaragua	6.91%
25	Peru	6.87%
27	Guatemala	6.78%
28	El Salvador	6.76%
31	Paraguay	6.65%
32	Honduras	6.57%
37	Chile	6.27%
41	Colombia	6.01%
46	Panama	5.55%
49	Mexico	5.37%
50	Costa Rica	5.23%
53	Jamaica	5.04%
60	Brazil	4.70%
61	Bolivia	4.67%
68	Dominican       Republic	4.27%
71	Uruguay	4.18%
73	Guyana	4.10%
86	Ecuador	3.36%
96	Argentina	2.80%
121	Venezuela	1.17%

Middle East average: 5.04%

Rank	Country	10 yr. growth
9	Jordan	8.23%
10	Georgia	8.14%
26	Morocco	6.79%
34	Egypt	6.55%
35	Armenia	6.51%
42	Tunisia	5.86%
51	Turkey	5.21%
55	Oman	4.94%
62	Azerbaijan	4.63%
67	United Arab       Emirates	4.32%
69	Syria	4.22%
80	Israel	3.68%
84	Algeria	3.45%
99	Iran	2.75%
101	Kuwait	2.73%
102	Bahrain	2.55%

Oceania average 4.18%

Rank	Country	10 yr. growth
19	Indonesia	7.31%
59	New Zealand	4.75%
89	Australia	3.09%
117	Singapore	1.57%

Europe average: 3.12%

Rank	Country	10 yr. growth
29	Moldova	6.66%
48	Albania	5.46%
52	Macedonia	5.19%
64	Romania	4.41%
65	Cyprus	4.39%
66	Lithuania	4.36%
70	Bosnia and Herzegovina	4.19%
72	Bulgaria	4.10%
75	Estonia	3.97%
76	Latvia	3.96%
78	Montenegro	3.81%
79	Serbia	3.77%
81	Slovakia	3.54%
82	Poland	3.48%
83	Hungary	3.47%
85	Portugal	3.40%
87	Ukraine	3.21%
88	Ireland	3.10%
92	Croatia	3.01%
93	United Kingdom	2.97%
94	Denmark	2.88%
95	Czech Republic	2.82%
97	France	2.78%
98	Russia	2.75%
100	Finland	2.74%
104	Spain	2.49%
107	Slovenia	2.41%
108	Germany	2.35%
109	Sweden	2.34%
110	Netherlands	2.29%
111	Switzerland	2.28%
113	Iceland	2.19%
114	Belgium	2.00%
115	Austria	1.83%
116	Italy	1.83%
118	Greece	1.53%
123	Norway	0.70%
124	Luxembourg	-0.07%

North America average: 2.67%

Rank	Country	10 yr. growth
90	Canada	3.07%
112	United States	2.27%

For media inquiries into the EconomyPolitics Index of Economic Efficiency, please contact economipolitics [at] gmail [dot] com. Please feel free to use the full index, but must source back to EconomyPolitics.

EconomyPolitics, 2010 Global 10 Yr Growth Rates