11 Interesting Facts of World's Economy Table of Contents
- 11 Interesting Facts that you never knew
- President Obama loved debt
- Prices aren’t the only thing that go up over time
- Big economy? Build a city from scratch
- In China, they’ve got unicorns
- The U.S. Economy might not be top dog for much longer
- Bigger doesn’t necessarily mean better
- A big economy means you can recreate history
- Look to the sun for a possible economic boost
- Technology is partly to blame for India’s economic expansion
- London’s not really the center of the economic universe
- Brexit’s ultimate effect on the British economy still remains a mystery
11 Interesting Facts that you never knew
It’s a word that makes most people grumble as soon as they hear it.
It moves up and down, it grows and shrinks, one of the bestselling financial magazines in the world is named after it, it’s often paired with scary words like ‘inflation’ and ‘depression,’ and every country in the world has one.
We’re of course talking about economy, a word we like to blame for the terrible stuff that happens in life, like money problems and unemployment rates, but about which we actually know very little.
To better understand what the economy is and how it works, we’ve compiled 11 fun facts that explain what economies around the world can do in the best and worst of times.
1. President Obama loved debt
So much, in fact, that that US national debt climbed more during his first term than it did under the previous 42 presidents—combined.
According to The Balance, the actual number ranges between $983 billion to $9 trillion.
How come? Well, there are a few answers including debt carried over from the previous president (hardly his fault), projected budget deficits and new initiatives introduced by Obama.
What initiatives? Well, many people remember his famous stimulus package and tax cuts.
The silver lining is that in the short term, deficit spending can drive both economic growth and employment, often resulting in an initial surge to the overall economy.
2. Price goes up and Debts goes up
So does debt, and not even the biggest economy in the world is safe from such an increase.
In the United States, the total debt in 1970 was less than $2 trillion, and was a combination of government debt, business debt, and consumer debt.
3. Big economy can build a city from scratch
When you’ve got the world’s second largest economy, you can do crazy things, like build a city twice the size of Manhattan out of nowhere in order to solve overcrowding.
This is exactly what’s happening now in China with Xiongan, located 100km southwest of Beijing, and which, when completed, will cover an area of 2,000 sq km—more than double New York City or Singapore.
Today, that number has risen to a staggering $56 trillion and counting.
4. There are unicorns in China
Sadly, while China’s unicorns won’t fly you away to a mythical land, they could make some people rich.
A unicorn is the name given to a private company valued at $1 billion or more, and China has at least 100 of them.
Companies valued at over $10 billion get the name decacorn, and there are over 8 of them helping to float the economy, including giants like Alibaba-owned Ant Financial, Didi Chuxing (the UBER of China), and mobile phone maker Xiaomi.
For size perspective, consider this: the net worth of these 108 companies is $435 billion, almost the size of Belgium’s economy.
5. The U.S. Economy will not be top dog for much longer
In 2001, the World Bank reported that with $10.6 trillion, the US GDP accounted for 32% of the World Economy (estimated at roughly $80 trillion).
But by 2016, according to Forbes, that number had dropped to 22% as global superpower China caught up.
It’s still in the lead, but according to various reports, there are signs suggesting that China is quickly catching up and Japan is also advancing.
6. Bigger economy doesn’t mean better
An economy’s size doesn’t always mean life is easy.
India has the sixth largest economy in the world, with a $2.6 trillion GDP, and is one of the fastest growing economies by today’s standards.
Still, regional disparity means that almost one-third of the population are below the poverty line.
Two of India’s largest regions—Uttar Pradesh and Bihar—have a combined population that almost matches the U.S., but their combined GDP is less than Michigan, which ranks #14 in the country with a GDP of $505 million.
7. China recreating a new Silk Road
China has announced plans to build a new Silk Road, committing $1 trillion to the project.
The modern update to the ancient network of trade routes will be called One Belt, One Road, and basically serve the same purpose—to connect China more directly with its biggest western trading partners, including Central Asia, the Middle East, and Europe.
However, this time, rather than thousands of miles of paths and mountain passes,
One Belt, One Road will consist of a network of interlinking trade deals and various infrastructure projects, ultimately involving more than 68 countries and 4.4 billion people.
8. Clean Power is the future
Renewable energy is touted as one of today’s most powerful economic boons, and not just because it’s good for the earth.
First, it brings in jobs.
There are over 10 million people around the world employed in renewable energy positions, with just over 3 million in solar power alone.
Secondly, it attracts attention and investments.
In the U.S., wind power has brought in more than $100 billion in investments since 2005, with a growing rate of $10 to $20 billion every year since.
China invests more in renewable power each year than any other country in the world, plus it’s the biggest generator of solar power in the world.
As one of the biggest exporters of renewable energy technology and equipment, Germany has added significantly to its economy, an amount that according to estimations is expected to climb to up to €69 billion by 2030.
9. India is the IT expert
It’s no secret that India is quickly becoming one of the world’s most prolific countries in terms of technology.
As one of the biggest exporters of IT and software services nowadays, its growth is staggering when you look at the numbers.
Back in 1990—about the time modern day technology began its growth—IT exports in India were next to nothing, but within 20 years, India’s net IT exports have grown to over $70 billion.
10. London’s not really the center of the economic universe
Contrary to popular belief, as well as the fact that two of the world’s most important financial centers—City of London and Canary Wharf—are located in London, the majority of UK’s economic growth takes place in the north, not in the capital.
According to different reports, a huge number of new businesses have been popping up lately in northern cities like Manchester, spurring an average economic growth of 74%.
11. Brexit’s ultimate effect on the British economy still remains a mystery
While most people watch the television for updates on Brexit, financial analysts watch the markets, and the U.K.’s departure from the EU has been one of the biggest hot button issues in recent years.
Every time a meeting is held or an agreement is rejected, the markets take a tumble.
In December 2018, the pound plummeted to its lowest level in two years—just after Prime Minister Theresa May delayed the parliamentary vote on her Brexit deal.
Stock markets continue to rock back and forth, with economic fears growing by the day.
But in the end, the general feeling is that leaving the EU will be bad for the economy, though there’s no way to tell exactly how.
Want to find out why people involved in finance, such as traders, have such an interest in global economies?
Find out more about how economic activity affects the financial markets at Tickmill.