Countries with Highest GDP Growth 2024 - Global Finance Magazine (2024)

Economic growth is a marathon, not a sprint and while some nations have made plans for long-term progress, others have squandered their good fortune and resources.

You might have never heard of Nauru, a tiny island in the South Pacific Ocean, which for a few years during the past decade was the fastest-growing economy on Earth. The reason? Bird poop, specifically the island’s fossilized bird guano supply, an exceptional, and therefore expensive, natural fertilizer. Once the supply began drying up, Nauru’s gross domestic product surge virtually ceased. The island now survives economically due to the support it receives from Australia, which has built a detention center there for imprisoned asylum seekers. Such sudden injections of foreign funds can boost economic output dramatically—at least on paper—but the truth is that Nauru is facing financial ruin.

How Economic Growth Takes Place Is Critical

The story of this island is a cautionary tale about the perils of nations relying on just one source of income for their economic well-being instead of trying to develop a diversified economy. The people of another quite small nation, Guyana—215,000 square kilometers bordering Brazil, Suriname, Venezuela and the North Atlantic Ocean—could learn a thing or two from Nauru’s experience.

A few years ago—following one of the largest offshore crude discoveries in decades—Guyana became officially an oil producer. With output currently reaching approximately 650,000 barrels per day and growing, the windfall is already transforming the nation from one of the poorest per capita in Latin America into one of the richest. This year, excluding one-off rebounds from previous double-digit downturns (Macao or Maldives welcoming back tourists after Covid, for example), Guyana is set to maintain its status as the world’s fastest-expanding economy for the fifth year in a row, with a GDP growth rate of almost 34%.

Yet, experts have already warned of the so-called “resource curse,” meaning the mismanagement of revenue from oil extraction, which has historically been linked to slow economic growth, corruption, authoritarianism and a whole array of social maladies as the example of Venezuela demonstrates. To address these concerns, Guyana’s government has implemented a sovereign wealth fund and promised to invest all oil profits in the construction of roads, schools and hospitals. However, critics have argued that the guidelines and rules governing the fund are less than transparent, and have questioned whether these sudden riches will enrich just a few or lift many out of poverty. In the meantime, Guyana’s fishermen in the coastal area say that all the drilling and vibrations from oil exploration are ruining the marine environment, and that today their catches are a small fraction of what they used to be. Exploiting one of Guyana’s natural resources is damaging another.

Balanced Economic Development Is Key

While the jury is still out for Guyana, the experiences of Nauru or Venezuela tell us that single-year GDP figures can be misleading, since many once-fast-growing economies have experienced quick and dramatic downfalls, and because not everyone shares in all the benefits or downsides of an economy’s shifting fortunes.

At the other end of the spectrum, one can find the examples of Ethiopia, Rwanda, Mongolia, China, India, Bangladesh or Vietnam, which have shown sustained, robust GDP growth over many years among close to 200 nations routinely surveyed by the IMF.

Meaningful economic growth is a marathon, not a sprint. Amid bouts of ethnic violence and extreme weather events exacerbated by climate change, over the past two decades Ethiopia has still managed to make improvements to its infrastructure and encourage greater private-sector involvement in an attempt to transform its agriculture-based economy into a manufacturing hub. Rwanda—with its extensive economic development and poverty reduction programs—shows what efficient and democratic political institutions can do to a country once ravaged by civil war and genocide: turn it into an economic miracle. Despite having encountered a few bumps along the road, China remains on track to pass the US as the world’s largest economy in the next decade. Meanwhile, Bangladesh, Vietnam and India—which is expected to surpass Germany and become the third-largest economy by 2027—have taken a page from China’s playbook by turning themselves into thriving manufacturing centers first and expanding to higher value-added sectors later.

It is not too hard to see which nations have made sustainable plans for the long haul and which ones bet their economic futures on a single commodity. It will be interesting to see how they all fare 10 years from now.