Have you ever wondered how your country compares to others in terms of economic growth? Look no further.
Courtesy of Paul Bloxham, chief Australia and New Zealand economist at HSBC, here’s a fascinating chart showing the GDP growth performance of various major nations all the way back to 1960.
It’s a beauty, right?
For clarity purposes, the areas of red indicate when a country has experienced a technical recession, defined as two consecutive quarters of negative real GDP.
While periods of growth — shown in green — have dominated, each individual nation has a widely differing fortunes over that period — some have enjoyed long periods of uninterrupted growth while others have fallen into recession on a regular basis.
In particular, there is a smattering of red around 2008 and 2009, indicating just how severe the Global Financial Crisis was on broader economic conditions.
Some have recovered from that period of turbulence while others are still grappling with the fallout, even close to a decade after it hit.
According to Bloxham, of the 7,350 quarters in the sample, 827 quarters were periods of recession, equating to an average for all nations of nine years between economic downturns.
“The poorest performer is Greece, which is in technical recession for 25% of time,” says Bloxham.
“The best performers are the emerging economies in the sample, such as China and India, where there have been no technical recessions.”
For Australia, dubbed the “lucky country” by some commentators, it’s now been over 26 years since it experienced a technical recession, the longest current stretch of uninterrupted economic growth for a developed nation.
However, according to Bloxham, Australia’s envious track record is not the longest stretch of growth for a developed nation in modern times, at least not yet.
“Australia’s current boom is the longest period of continuous growth without two consecutive quarters of negative GDP of any economy except Japan, from 1961 to 1993, and the Netherlands, from 1981 to 2008,” he says.
That differs from the view of some commentators who suggest that Australia is currently on an unprecedented run of uninterrupted economic growth for a developed nation.
While that debate will go on, it’s still an impressive run nonetheless.
However, while Bloxham says Australia has benefited from the rise of China’s economy, and its insatiable demand for Australia’s mineral wealth, along with prior market reforms and an independent central bank, he admits growth has also been assisted by strong levels of population growth.
“Australia’s GDP has benefitted significantly from growth in population,” he says.
Indeed, a key reason that Australia did not have a technical recession in 2009, in the early stages of the Global Financial Crisis, was that population growth was strong.
“It is harder for overall GDP to fall when population growth is strong.”
Bloxham says that if GDP were measures on a per capita basis — the output of each citizen on average — Australia would have fallen into a technical recession during the GFC.
“If recessions were defined on the basis of per capita GDP, rather than overall GDP growth, Australia would not have had such a long boom,” he says.
He adds that using real GDP to garner the success of an economy is also fraught with danger, admitting that GDP is a limited measure of overall welfare of citizens.