This column is a list of the significant economic events of last year.
1. In the top 50 largest economies in the world by GDP size, the five worst performing and deepest GDP contractions in 2020 were: Spain with -10.8%, followed by Argentina -9.9%, the UK -9.8%, the Philippines -9.6%, and Italy -8.9%. Final 2020 data with projections for 2021-2025 were released by the IMF World Economic Outlook (WEO) in October 2021.
2. Of the top 50, only seven countries managed to grow and escape contraction in 2020, four of which are in South and East Asia: Bangladesh with 3.5%, Taiwan 3.1%, Vietnam 2.9%, and China 2.3%. The Philippines was the 34th largest economy in the world in 2020 but may have been the 32nd if it shrank only by around -8% or lower and not -9.6%.
3. There was GDP growth in the first to third quarters of 2021. Almost all countries managed to grow but largely due to “base effect” — their 2020 GDP levels were low so any marginal increase above that low base would translate to growth. The Philippines grew 5.1% in the first three quarters of 2021, but that would be equivalent only to the GDP level of 2018. It will reach the 2019 level around the second or third quarter of 2022.
4. Inflation in 2020. Most countries experienced lower consumer prices compared to 2019. The Philippines and Vietnam though experienced slight increases in inflation. Strict lockdowns in the Philippines resulted in some supply disruptions and delays (goods, repairs and spare parts for tractors, trucks, boats, etc.) due to the many checkpoints and barriers between provinces — even between cities of the same province — which contributed to higher inflation.
5. Inflation in 2021 was double or triple the 2020 levels for many countries — the US, the UK, Germany, France, Italy, etc. Free money from governments distributed to people who spent it even if they did not contribute to the production of goods and services, logistical delays in big seaports, later the spikes in energy prices, contributed to this. In East Asia, the Philippines has the highest inflation rate — this is not good.
6. Merchandise exports in 2020 declined in many countries except China, Taiwan, and Vietnam. These three Asians also escaped GDP contractions that year. All G7 member countries experienced significant declines in exports. Closure of many manufacturing plants for several weeks, and strict and slow inspections in ports contributed to this. Global exports data were released by the World Trade Organization (WTO) World Trade Statistical Review (WTSR) 2021 on July 30.
7. Philippine exports remain the smallest among emerging and developed East Asia at only $64 billion in 2020. Our neighbors — Malaysia, Thailand and Vietnam — have about four times that level while Singapore has nearly six times that level (see Table 1).
8. Vaccine discrimination or implicit mandatory vaccination as a business and economic policy by many governments in rich countries went on a wild roll. By the end of the third quarter 2021, many of them have vaccination rates 65-86% of their total population already. By end-2021, this went up to 73-88% of their populations. The Philippines had a slow start but rushed towards 51% by end-2021.
9. Infections from the COVID-19 Omicron variant seemed to be higher in rich countries with high vaccination rates, their seven-days average cases per million population last week ranged from 2,300+ (Germany) to 16,800+ (France) but deaths from Omicron seem low, and seem even lower in countries with lower vaccination rates like the Philippines, Indonesia, and India.
10. Lockdowns and restrictions on the mobility of people continued until end-2021. Looking at the weekly Google Community Mobility Reports (GCMR) show how visitors to (or time spent in) categorized places change (in percent) compared to baseline days, using the median value from the five‑week period between Jan. 3 to Feb. 6, 2020. As of Dec. 30, 2021, mobility in Transit Stations (TS) and Work places (WP) remained high. The Philippines, for instance, has -48% in WP (see Table 2).
Anemic GDP growth and high inflation in 2021, plus high public debt, continued mobility restrictions and lockdowns, vaccine discrimination, all these point to a non-bright early 2022. We hope that governments, multilaterals, most NGOs and media, pharma, etc. will temper the scare and hysteria. Viruses will keep mutating and evolving 100%, and humans and other living creatures will also keep evolving 100% naturally. The sooner that we realize we need to live with evolving viruses, the better.
This is the sixth in this column’s annual series “Top 10 news of the year,” the others being:
1. “Top 10 news of 2016,” https://www.bworldonline.com/are-the-people-satisfied-or-disappointed-with-more-government-the-top-10-news-of-2016/.
2. Trends in global and national trade (2017), https://www.bworldonline.com/trends-global-national-trade-prospects-near-future/.
3. Top 10 economic news of 2018, https://www.bworldonline.com/top-10-economic-news-of-2018/.
4. Top 10 economic news of 2019, https://www.bworldonline.com/top-10-economic-news-stories-of-2019/.
5. Top 10 economic news of 2020, https://funwithgovernment.blogspot.com/2020/12/bworld-468-top-10-economic-news-of-2020.html.
Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.