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Visualizing the Rise of the U.S. Dollar Since the 19th Century

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Visualizing the Rise of the U.S. Dollar Since the 19th Century

As the world’s reserve currency, the U.S. dollar made up 58.4% of foreign reserves held by central banks in 2022, falling near 25-year lows.

Today, emerging countries are slowly decoupling from the greenback, with foreign reserves shifting to currencies like the Chinese yuan.

At the same time, the steep appreciation of the U.S. dollar is leading countries to sell their U.S. foreign reserves to help prop up their currencies, in turn buying currencies such as the Australian and Canadian dollars to help generate higher yields.

The above animated graphic from James Eagle shows the rapid ascent of the U.S. dollar over the last century, and its gradual decline in recent years.

Dollar Dominance: A Brief History

In 1944, the U.S. dollar became the world’s reserve currency under the Bretton Woods Agreement. Over the first half of the century, the U.S. ran budget surpluses while increasing trade and economic ties with war-torn countries, expanding its influence as the world’s store of value.

Later through the 1960s, the U.S. dollar share of global foreign reserves rapidly increased as political allies stockpiled the dollar.

By 2000, dollar dominance hit a peak of 71% of global reserves. With the creation of the European Union a year earlier, countries such as China began increasing the share of euros in reserves. Between 2000 and 2005, the share of the dollar in China’s foreign exchange reserves fell by an estimated 15 percentage points.

The dollar began a long rally after the global financial crisis, which drove central banks to cut their dollar reserves to help bolster their currencies.

Fast-forward to today, and dollar reserves have fallen roughly 13 percentage points from their historical peak.

The State of the World’s Reserve Currency

In 2022, 16% of Russia’s export transactions were in yuan, up from almost nothing before the war. Brazil and Argentina have also begun adopting the Chinese currency for trade or reserve purposes. Still, the U.S. dollar makes up 80% of Brazil’s reserves.

Yet while the U.S. dollar has decreased in share of foreign reserves, it still has an immense influence in the world economy.

The majority of trade is invoiced in the U.S. dollar globally, a trend that has stayed fairly consistent over many decades. Between 1999-2019, 74% of trade in Asia was invoiced in dollars and in the Americas, it made up 96% of all invoicing.

Furthermore, almost 90% of foreign exchange transactions involve the U.S. dollar thanks to its liquidity.

However, countries are increasingly finding alternative options than the dollar. Today, Western businesses have begun settling trade with China in renminbi. Looking further ahead, digital currencies could provide options that don’t include the U.S. dollar.

Even more so, if the U.S. share of global GDP continues to shrink, the shift to a multipolar system could progress over this century.

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This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.

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Markets

Mapped: Inflation Projections by Country, in 2024

Global inflation projections look optimistic in 2024, but risks of a second wave of price pressures remain due to geopolitical shocks.

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This map shows inflation projections around the world in 2024.

Inflation Projections, by Country in 2024

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Global economic prospects hang on a delicate balance, largely hinging on the path of inflation.

While inflation looks to be easing, there remains the risk of a second wave of price pressures driven by geopolitical conflicts and supply disruptions in the Red Sea. Adding to this, a stronger than expected labor market could drive consumer demand, pushing up higher prices.

This graphic shows 2024 inflation projections around the world, based on forecasts from the International Monetary Fund (IMF).

 

 

Is Global Inflation On a Downward Path?

In 2024, global inflation is projected to decline to 5.8%, down from a 6.8% estimated annual average in 2023.

Tighter monetary policy and falling energy prices are forecast to dampen price pressures alongside a cooling labor market. Below, we show inflation projections across 190 countries:

CountryProjected Annual Inflation Change 2024
🇻🇪 Venezuela230.0%
🇿🇼 Zimbabwe190.2%
🇸🇩 Sudan127.3%
🇦🇷 Argentina69.5%
🇹🇷 Türkiye54.3%
🇪🇬 Egypt25.9%
🇦🇴 Angola25.6%
🇮🇷 Iran25.0%
🇧🇮 Burundi22.4%
🇸🇱 Sierra Leone21.7%
🇸🇷 Suriname20.0%
🇪🇹 Ethiopia18.5%
🇵🇰 Pakistan17.5%
🇳🇬 Nigeria15.4%
🇲🇼 Malawi15.2%
🇬🇭 Ghana15.0%
🇾🇪 Yemen15.0%
🇲🇳 Mongolia12.8%
🇭🇹 Haiti12.7%
🇺🇿 Uzbekistan10.7%
🇹🇳 Tunisia10.6%
🇹🇲 Turkmenistan10.0%
🇺🇦 Ukraine10.0%
🇲🇬 Madagascar8.6%
🇰🇬 Kyrgyz Republic8.0%
🇿🇲 Zambia7.9%
🇲🇺 Mauritius7.8%
🇬🇳 Guinea7.8%
🇰🇿 Kazakhstan7.5%
🇧🇩 Bangladesh7.2%
🇲🇲 Myanmar7.2%
🇸🇹 São Tomé and Príncipe7.2%
🇬🇲 The Gambia7.1%
🇨🇩 Democratic Republic of the Congo7.1%
🇩🇿 Algeria6.8%
🇹🇯 Tajikistan6.5%
🇳🇵 Nepal6.5%
🇰🇪 Kenya6.5%
🇲🇿 Mozambique6.5%
🇹🇴 Tonga6.2%
🇸🇸 South Sudan6.1%
🇱🇷 Liberia6.0%
🇺🇾 Uruguay5.7%
🇻🇺 Vanuatu5.6%
🇵🇱 Poland5.5%
🇬🇾 Guyana5.5%
🇷🇼 Rwanda5.5%
🇭🇺 Hungary5.4%
🇳🇦 Namibia5.3%
🇬🇶 Equatorial Guinea5.2%
🇧🇹 Bhutan5.1%
🇦🇿 Azerbaijan5.0%
🇯🇲 Jamaica5.0%
🇱🇸 Lesotho5.0%
🇲🇩 Moldova5.0%
🇷🇺 Russia5.0%
🇺🇬 Uganda5.0%
🇳🇮 Nicaragua4.8%
🇵🇬 Papua New Guinea4.7%
🇷🇴 Romania4.7%
🇬🇹 Guatemala4.6%
🇼🇸 Samoa4.5%
🇿🇦 South Africa4.5%
🇸🇰 Slovak Republic4.5%
🇨🇴 Colombia4.5%
🇮🇳 India4.4%
🇧🇼 Botswana4.4%
🇸🇿 Eswatini4.3%
🇱🇻 Latvia4.3%
🇭🇳 Honduras4.2%
🇳🇷 Nauru4.2%
🇧🇪 Belgium4.0%
🇮🇸 Iceland4.0%
🇹🇿 Tanzania4.0%
🇰🇮 Kiribati4.0%
🇲🇷 Mauritania4.0%
🇵🇾 Paraguay4.0%
🇷🇸 Serbia4.0%
🇩🇴 Dominican Republic4.0%
🇦🇲 Armenia4.0%
🇧🇷 Brazil3.9%
🇸🇴 Somalia3.9%
🇹🇻 Tuvalu3.8%
🇧🇴 Bolivia3.8%
🇧🇾 Belarus3.7%
🇨🇲 Cameroon3.7%
🇽🇰 Kosovo3.7%
🇪🇪 Estonia3.6%
🇧🇧 Barbados3.6%
🇸🇧 Solomon Islands3.6%
🇦🇱 Albania3.6%
🇦🇺 Australia3.4%
🇪🇸 Spain3.4%
🇵🇭 Philippines3.4%
🇻🇳 Vietnam3.4%
🇲🇦 Morocco3.3%
🇸🇮 Slovenia3.3%
🇦🇹 Austria3.2%
🇭🇷 Croatia3.2%
🇨🇬 Republic of Congo3.2%
🇳🇴 Norway3.2%
🇸🇬 Singapore3.2%
🇲🇽 Mexico3.2%
🇹🇩 Chad3.1%
🇲🇪 Montenegro3.1%
🇱🇹 Lithuania3.1%
🇨🇷 Costa Rica3.0%
🇰🇭 Cambodia3.0%
🇮🇹 Italy3.0%
🇨🇱 Chile3.0%
🇬🇪 Georgia3.0%
🇬🇼 Guinea-Bissau3.0%
🇮🇶 Iraq3.0%
🇱🇦 Lao P.D.R.3.0%
🇫🇲 Micronesia3.0%
🇩🇲 Dominica2.9%
🇸🇪 Sweden2.8%
🇩🇪 Germany2.8%
🇬🇷 Greece2.7%
🇲🇾 Malaysia2.7%
🇮🇪 Ireland2.6%
🇯🇵 Japan2.6%
🇫🇯 Fiji2.6%
🇲🇭 Marshall Islands2.6%
🇬🇩 Grenada2.6%
🇺🇸 United States2.6%
🇵🇹 Portugal2.6%
🇮🇱 Israel2.6%
🇧🇸 The Bahamas2.6%
🇯🇴 Jordan2.6%
🇱🇾 Libya2.5%
🇳🇿 New Zealand2.5%
🇧🇯 Benin2.5%
🇩🇰 Denmark2.5%
🇩🇯 Djibouti2.5%
🇸🇲 San Marino2.5%
🇹🇱 Timor-Leste2.5%
🇮🇩 Indonesia2.5%
🇦🇬 Antigua and Barbuda2.5%
🇳🇪 Niger2.5%
🇨🇫 Central African Republic2.5%
🇵🇸 West Bank and Gaza2.5%
🇲🇻 Maldives2.4%
🇲🇹 Malta2.4%
🇳🇱 Netherlands2.4%
🇸🇨 Seychelles2.4%
🇬🇧 United Kingdom2.4%
🇬🇦 Gabon2.4%
🇰🇳 St. Kitts and Nevis2.3%
🇭🇰 Hong Kong SAR2.3%
🇲🇰 North Macedonia2.3%
🇦🇪 UAE2.3%
🇹🇹 Trinidad and Tobago2.3%
🇶🇦 Qatar2.3%
🇵🇦 Panama2.2%
🇸🇦 Saudi Arabia2.2%
🇵🇪 Peru2.2%
🇨🇾 Cyprus2.2%
🇨🇿 Czech Republic2.2%
🇹🇬 Togo2.2%
🇧🇬 Bulgaria2.2%
🇦🇼 Aruba2.2%
🇨🇦 Canada2.1%
🇧🇦 Bosnia and Herzegovina2.1%
🇱🇨 St. Lucia2.1%
🇦🇩 Andorra2.0%
🇧🇫 Burkina Faso2.0%
🇨🇻 Cabo Verde2.0%
🇨🇮 Côte d'Ivoire2.0%
🇰🇷 Korea2.0%
🇲🇱 Mali2.0%
🇻🇨 St. Vincent and the Grenadines2.0%
🇨🇭 Switzerland1.9%
🇵🇷 Puerto Rico1.9%
🇨🇳 China1.9%
🇫🇮 Finland1.9%
🇫🇷 France1.9%
🇹🇼 Taiwan1.8%
🇵🇼 Palau1.8%
🇹🇭 Thailand1.8%
🇱🇺 Luxembourg1.7%
🇸🇻 El Salvador1.7%
🇲🇴 Macao SAR1.7%
🇴🇲 Oman1.7%
🇰🇲 Comoros1.6%
🇧🇳 Brunei Darussalam1.5%
🇪🇨 Ecuador1.5%
🇧🇭 Bahrain1.4%
🇧🇿 Belize1.2%
🇸🇳 Senegal0.3%

Venezuela, with the largest oil reserves globally, is projected to see inflation reach 230%—the highest overall.

Across the last decade, the country has faced hyperinflation, reaching a stunning 10 million percent in 2019. Since U.S. sanctions were lifted last year, inflation has fallen dramatically due to sharp cuts in government spending and increasing dollarization of the economy, which is bolstering the bolivar.

In America, slower economic growth coupled with a softening labor market could ease inflation, which is forecast to reach 2.6% in 2024. While the Federal Reserve has signaled that the worst is over, unexpected momentum across the economy could cloud the outcome. As of November 2023, $290 billion in excess savings were held across American households, which may continue to spur consumer demand.

Over in Europe, inflation is anticipated to average 3.3% across advanced economies. Today, sinking natural gas prices and low GDP growth are keeping inflation expectations at bay.

China, the world’s second-largest economy, is contending with falling prices due to property market trouble, which drives about a third of the country’s economic growth. Amid sluggish economic activity, a manufacturing slowdown, and low consumer confidence, inflation is forecast to reach 1.7%.

What Could Cause Inflation to Re-Accelerate?

While inflation shocks driven from the pandemic appear to be over, key risks could drive up inflation:

  • Geopolitical Pressures: Rising shipping costs due to the conflict in the Middle East and Red Sea could continue to escalate and energy prices could increase amid disrupted supply, driving inflation higher.
  • Strong Consumer Demand: Accumulated excess savings could continue to fuel economies, leading central banks to remain hawkish. Persistently high wage growth—which increased about double the pre-pandemic average across advanced nations in 2023—could boost consumption and higher prices.
  • Rising Housing Costs: Shelter makes up about a third of the Consumer Price Index, the biggest component overall. If prices accelerate, it presents key inflationary risks. As of January 2024, U.S. shelter costs increased 6% annually.

So far, the global economy has been resilient. While risk factors remain, inflation projections suggest that the path towards a 2% target is slow, but going in the right direction.

 

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