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Timeline: How the Global Economy Played Out in 2015



Timeline: How the Global Economy Played Out in 2015

Timeline: How the Global Economy Played Out in 2015

Many people start a new year with renewed optimism. However, the reality of each new year is not so detached from the previous.

That’s why on the first trading day of 2016, optimism in the markets was short-lived as news out of China was quick to spook investors.

Chinese manufacturing continued to contract for the 10th month in a row in December. The “blue chip” CSI 300 index fell until trading was halted, with losses capped at 7% – its biggest fall in nine years. China also lowered its guidance on the yuan, which dropped to its lowest levels since 2011.

These concerns, along with other disappointing numbers out of the US and UK, eventually spread to other markets. The Nikkei was down 3%, the FTSE 100 was down 2.4%, and the German DAX down 4.3% for its worst opening day to a new year in history.

U.S. markets were in the same boat, opening the day down 2%. Canada’s TSX and TSXV are down less than 1% with much of the damage to commodities already being done.

New Year, Same Problems

Most investors and central bankers find themselves between a rock and a hard place to start 2016.

The Federal Reserve finally raised rates in December, but mainly in the interest of preserving credibility.

While unemployment itself has looked good enough and there has been some wage growth, the labor force participation is at 62.5%, which is essentially its lowest mark since 1977. Meanwhile, the stock market has been volatile, junk bonds have been hammered, and manufacturing contracted in December at the fastest pace in the U.S. in more than six years.

Most major central banks still have rates close to zero, which gives little policy ammunition for any additional stimulus. The flipside of these record-low rates has been soaring (or extremely bubbly) asset prices that have failed to trickle down to Main Street.

A slowing China and general oversupply has led to slumping commodity prices.

Oil has been hammered down to its lowest price since 2003. Copper is trading at $2/lb, which is comparable to its price during the Financial Crisis. These low input prices, in theory, are great for consumers and manufacturers. In reality, however, they usually mean that economic growth is grinding to a halt.

It’s hard to say where markets will turn in 2016, but for now it will continue to be much of the same volatility until the picture becomes clearer.

Original graphic by: The Straits Times

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Ranked: The World’s 50 Top Countries by GDP, by Sector Breakdown

This graphic shows GDP by country, broken down into three main sectors: services, industry, and agriculture.



Visualized: The Three Pillars of GDP, by Country

Over the last several decades, the service sector has fueled the economic activity of the world’s largest countries. Driving this trend has been changes in consumption, the easing of trade barriers, and rapid advancements in tech.

We can see this in the gross domestic product (GDP) breakdown of each country, which gets divided into three broad sectors: services, industry, and agriculture.

The above graphic from Pranav Gavali shows GDP by country, and how each sector contributes to an economy’s output, with data from the World Bank.

Drivers of GDP, by Country

As the most important and fastest growing component of GDP, services make up almost 60% of GDP in the world’s 50 largest countries. Following this is the industrial sector which includes the production of raw goods.

Below, we show how each sector contributes to GDP by country as of 2021:

(% GDP)
(% GDP)
(% GDP)
(% GDP)
🇺🇸 U.S.77.617.91.03.6$22.9
🇨🇳 China53.539.37.20.0$16.9
🇯🇵 Japan69.928.81.00.4$5.1
🇩🇪 Germany62.926.70.99.5$4.2
🇬🇧 UK71.617.30.710.4$3.1
🇫🇷 France70.316.71.611.4$2.9
🇮🇳 India47.926.117.38.7$2.9
🇮🇹 Italy65.022.71.910.4$2.1
🇨🇦 Canada*67.724.11.76.6$2.0
🇰🇷 South Korea57.$1.8
🇧🇷 Brazil57.820.27.514.6$1.6
🇦🇺 Australia65.725.52.36.5$1.6
🇷🇺 Russia54.131.83.910.3$1.6
🇪🇸 Spain67.420.42.69.6$1.4
🇲🇽 Mexico59.$1.3
🇮🇩 Indonesia42.839.813.34.1$1.2
🇮🇷 Iran47.338.012.42.3$1.1
🇳🇱 Netherlands69.417.91.511.2$1.0
🇨🇭 Switzerland71.924.60.62.8$0.8
🇹🇷 Turkiye52.831.15.510.6$0.8
🇹🇼 Taiwan60.638.01.50.0$0.8
🇸🇦 Saudi Arabia46.544.72.76.1$0.8
🇵🇱 Poland56.927.92.213.0$0.7
🇧🇪 Belgium68.819.60.710.9$0.6
🇸🇪 Sweden65.022.51.311.3$0.6
🇮🇱 Israel72.417.21.39.1$0.5
🇦🇷 Argentina52.523.67.116.8$0.5
🇦🇹 Austria62.425.81.210.5$0.5
🇳🇬 Nigeria43.831.423.41.4$0.5
🇹🇭 Thailand56.335.08.70.0$0.5
🇮🇪 Ireland55.437.81.05.8$0.5
🇭🇰 Hong Kong89.$0.4
🇩🇰 Denmark66.719.30.913.1$0.4
🇸🇬 Singapore70.324.40.05.3$0.4
🇿🇦 South Africa63.024.52.510.0$0.4
🇵🇭 Philippines61.028.910.10.0$0.4
🇪🇬 Egypt52.531.211.44.9$0.4
🇧🇩 Bangladesh51.333.311.63.7$0.4
🇳🇴 Norway51.836.31.710.2$0.4
🇻🇳 Vietnam41.237.512.68.8$0.4
🇲🇾 Malaysia51.637.89.61.1$0.4
🇦🇪 U.A.E.51.647.50.90.0$0.4
🇵🇰 Pakistan52.118.822.76.4$0.3
🇵🇹 Portugal64.719.62.213.5$0.3
🇫🇮 Finland60.324.12.313.4$0.3
🇨🇴 Colombia58.$0.3
🇷🇴 Romania59.$0.3
🇨🇿 Czechia58.830.31.89.1$0.3
🇨🇱 Chile54.431.33.610.6$0.3
🇳🇿 New

Industrial sector includes construction. Agriculture sector includes forestry and fishing. *Data as of 2019.

In the U.S., services make up nearly 78% of GDP. Apart from Hong Kong, it comprises the highest share of GDP across the world’s largest economies. Roughly 80% of American jobs in the private sector are in services, spanning from healthcare and entertainment to finance and logistics.

Like America, a growing share of China’s GDP is from services, contributing to almost 54% of total economic output, up from 44% in 2010. This can be attributed to rising incomes and higher productivity in the sector as the economy has grown and matured, among other factors.

In a departure from the top 10 biggest countries globally, agriculture continues to drive a large portion of India’s GDP. India is the world’s second largest producer of wheat and rice, with agriculture accounting for 44% of the country’s employment.

While the services sector has grown in India, it makes up a greater share in other emerging economies such as Brazil (58%), Mexico (59%), and the Philippines (61%).

Growth Dynamics

Services-led growth has risen faster than manufacturing across many developing nations, underpinned by productivity growth.

This structural shift is seen across economies. In many countries in Africa, for instance, jobs have increasingly moved from agriculture to services and trade, where it now accounts for 42% of jobs.

These growth patterns are supported by rising incomes in developing economies, while innovation in tech is lowering barriers to enabling service growth. As the industrial sector makes up a lower share of trade and economic activity, the service sector is projected to make up 77% of global GDP by 2035.

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