NEW YORK, October 27 - Prospects for countries can be looked at a number of ways. The International Monetary Fund (IMF), Goldman Sachs, the World Bank Group and the World Economic Forum all put out different reports to measure the prospects of countries.
The World Economic update is published by the International Monetary Fund addresses a global economy with activity that is picking up with recovery in investment, manufacturing, and trade with world growth continuing modestly. Specifically addressing countries, this report shows that the average Gross Domestic Product (GDP) of the United States from 1999 to 2008 was 2.6 percent with projections that the average will hold at 2.1 for 2017 and 2018. 2008 produced a negative GDP for America as result of the financial crisis of that year, with positive GDP growth from 2009 onward. Brazil has an average annual growth rate of 3.4 percent – faster than the United States, though this in a country whose economy is only about 1/20th the size of the massive US economy. Brazil had not experienced consistent growth since 2008, a source of disappointment for those cheered when the country was deemed a BRICS nation. The 2017 growth projection for Brazil is a GDP of 0.2 percent in 2017 with a rise to 1.7 percent in 2018.
At least the numbers for Brazil and the US are positive. Nigeria is another developing country to consider, and another story when it comes to growth. A period of strong, consistent expansion took place from 1999 to 2008 when GDP growth averaged 7.5 percent. GDP expansion held up through the global downturn until 2016. At that point, the economy faltered, battered by a collapse in oil prices and serious internal problems, including official corruption and the violent Boko Haram insurgency. Following a year of negative growth in 2016, the IMF’s projections for 2017 and 2018 are positive at 0.8 and 1.9 percent, respectively. These are not nearly as robust as figures from 2009 and 2010 when GDP was at 8.4 and 11.3 percent, but at least growth has returned after a short recession.
The Global Competitiveness report shows declining in openness, which threatens growth and prosperity. Here, countries are rated on a scale of 1-7 on how efficiently their economies are organized by way of transparency; rule of law; and takes on the determinants of long term growth. The United States has a score of 5.70, holding the number three spot. Brazil comes in at 81 with a score of 4.06. Nigeria’s score is 3.39 – number 127 on the list.
The Economy Rankings by Ease of Doing business report gives the United States a ranking of 8 on the 1-190 scale. Brazil’s ranking is 123 and Nigeria is at 169. The low rankings of Brazil and Nigeria insinuate a regulatory environment that is more conducive to starting and operating a local firm. Not only that, but the high ease of doing business would be expected from developing countries/economies as it indicates the prospects for foreign aid to supplied to a country.
With all of this being said about the countries of the United States, Brazil, and Nigeria, it is important to get down to the basics. While all three appear to be growing, investors will continue to be attracted to the dynamic and relatively transparent US economy. Brazil will win its share of investment as its large economy picks up steam again. Nigeria, however, continues to be hampered by domestic and international headwinds that will give investors pause.