According to the International World Monetary Fund, out of 194 economies, 41 economies increased while 153 economies decreased from 2019 to 2020.
The world is changing and human society is transforming in ways and speeds that are unimaginable until recent days. There is no question that economic progress in the global economy has changed much about the world – some good and some bad.
Keep reading for the four most significant trends in the global economy that are sure to shape our collective future.
1. Stock Markets May Not Be Good Indicators
Much of the world feels hopeful due to the seemingly fast recovery of many of our world economies as the COVID-19 pandemic goes into its second year. Consumer spending and industrial production are on the rise. This compared to the earlier drastic effects of shelter in place orders and business closures.
The long-term effects of companies protecting their profit margins may still cause drastic falls in the stock markets in 2021. Global economists warn that predicting the future of the global market based on investment markets may be folly. Unemployment and consumer spending are better indicators.
2. Supply Chains Growing Unstable
Short term trade reduction between countries due to the pandemic is not likely to bring lasting problems. Yet, the real supply chain challenges remain. Uncertainty in international trade is being caused by trade disputes between the world’s largest economies. Continued tensions over technology standards will continue to add to the strain.
Much of the developing world relies on strong international trade to drive their economies forward. These supply chain disruptions spell trouble for less developed countries. New economic models are in forced development which could, in the end, bring about real positive change in the world economy.
3. Innovation Remains Key
As the world struggles to overcome the challenges presented by the global pandemic, the key economic development trend will continue to be – innovation. Governments are increasingly aware of the importance of investing in R&D, education, and technological infrastructure.
Building new markets across all sectors of the economy is and will continue to be the deciding factor in a country’ss economic growth and in the development of the world economy in general. Look for green energy, education, and healthcare to be major points of interest in 2021.
4. International Investor Confidence Unwavering
Developing economies such as India and the Dominican Republic are enjoying stable growth. This is mostly due to surges in international investment from Japan, China, and the United States. For more about this trend check it out here.
Economic policies supporting globalization by international investing are leading economies to stability.
Economic Progress Moving Forward
It seems the world has come to a crossroads when it comes to economic progress. Most agree that the global economy is trending towards strengthening but only time will tell and there are likely to be bumps along the way. For more articles about this topic and more, keep reading our blog.