Contrary to widespread expectations of a global recession in 2023 due to efforts by central bankers to combat high inflation, the year has concluded with unexpected positive economic indicators. Global GDP is estimated to have grown by 3%, job markets remained resilient, inflation is showing signs of decline, and stock markets surged by 20%.
However, beneath this overall positive performance lies significant variation among countries. The Economist analyzed economic and financial indicators, including inflation, “inflation breadth,” GDP, employment, and stock market performance, across 35 mostly affluent nations. Rankings based on these measures reveal some unexpected results.
For the second consecutive year, Greece emerges at the top of the charts, marking a remarkable turnaround for an economy previously synonymous with mismanagement. Notable performers are concentrated in the Americas, with the United States securing the third position, closely followed by Canada and Chile. In contrast, several Northern European countries, including Britain, Germany, Sweden, and Finland, lag behind.
Addressing the challenge of rising prices was a focal point in 2023. Countries like Japan and South Korea effectively controlled core inflation, excluding volatile components. In contrast, Hungary faces a significant challenge with core inflation at around 11% year on year, and Finland is also grappling with inflationary pressures.
Countries are witnessing a reduction in entrenched inflation, as demonstrated by “inflation breadth,” indicating the share of items in the consumer-price basket with prices rising by more than 2% year on year. Aggressive interest rate increases in 2022 by central banks in Chile and South Korea are proving beneficial, with inflation breadth decreasing. The United States and Canada also experience notable declines.
Examining employment and GDP growth provides insights into how economies are serving ordinary citizens. While no country saw spectacular success in 2023, only a minority experienced GDP decline. Notably, the United States performed well in both GDP and employment, benefiting from record-high energy production and generous fiscal stimulus.
Looking at stock market performance, Greece stands out with a real value increase of over 40%. The government’s pro-market reforms have prompted investors to reassess Greek companies positively. Despite the country’s previous economic challenges, the IMF acknowledged Greece’s “digital transformation of the economy” and “increasing market competition.”
As the year concludes, Greece’s unexpected triumph invites the world to celebrate an economic success story and raises a metaphorical glass of ouzo to this unlikely champion.