TOP 5 ECONOMY OF THE WORLD
The inequality between the 1% ‘Haves’ and the 99% ‘Haves Not’ has created a dangerous modern world. Anti-government protests have become a norm all around the globe. Catastrophic proportion of worldwide destruction due to climate crisis has further challenged the world economy. The world economy is collapsing in massive proportion and the reasons have become evident for the whole world to experience in real time. Greed, Corruption and Authoritarian Rulers have become so very prominent that citizens of the world are saying – ‘Enough is enough’!
Complex economic theories are being floated by State-owned media houses and various media houses, who have sold their souls to greed, to misguide the world at large. Renowned economists will all talk big about GDP, NNP, National Index and what not – however, what they will never talk about is that 99% of the ‘Haves Not’ is not getting the required pay rise in proportion to the growing economic conditions and ever-rising price index. They will also not talk about how the 1% ‘Haves’ are accumulating wealth with their greed, power and corrupt practices.
The social unrest around the world has seen the rise of people’s power, because life has become a daily struggle living hand-to-mouth with no saving whatsoever. Standard of living has been Do the global leaders care about their respective nation’s citizen? Instead, they keep increasing the burden on the 99% ‘Haves Not’ by increasing taxes on silly things. The 30-year-dictatorship of Sudan’s President Omar al-Bashir was brought down just because he increased the ‘price of the bread’ to 300%. Today, Omar al-Bashir is languishing in jail, because the limit of citizen’s patience was ultimately broken.
Low rate of growth in productivity, the higher rate of never-ending unemployment worldwide, the unwanted trade war, greed and the corrupt practices of global leaders has pushed the world economy in such a precarious position that every nation in the world is facing uncertainty of their bright future. Banks are collapsing, because the rich escape paying the billions of dollars of debt by simply announcing ‘bankruptcy’. The global airline industry, real estate, auto industry, and production units are all facing the downturn. Businesses are being shut left, right and centre all over the world.
The ‘Top 5 Economy of the World’ is not only heading towards recession, but also is clueless as to how to revive the failing economy. The United States of America, China, Japan, Germany and India’s economy are in real danger, because of multiple reasons. Apart from the top 5 economy of the world, countries like the United Kingdom, Italy, Argentina, Iraq, Egypt, the EU nations, Lebanon, Chile, Mexico, Indonesia and Brazil – just to a name a few – are all facing economic crisis. Even small countries like Singapore and Hong Kong are facing the brunt of recession.
UNITED STATES OF AMERICA
The World No. 1 economy is failing like the nine pins in the bowling alley under President Donald Trump. The ongoing trade war with China, American hostility towards many developing nations and imposition of sanctions on various influential nations has taken a toll on global economy in a significant manner. Needless to say, the ripple effect of the decline of American economy is being felt worldwide.
Former IMF Head Christine Lagarde stated recently that Trump has become the source of major risks facing the global economy. Global investors are scared to invest and risk their money. No one understands or knows how Trump will react against their country or economy. In fact, even the American people are not sure what he would do next to improve the nation’s economy. Trump’s unilateralism has become a huge threat to the stability of the global economy.
The latest quarterly GDP reports show the American economy growing at a pittance 1.9% with the federal deficit exceeding $1 trillion. The US manufacturing sector is in recession, real exports of goods and services have declined, mining jobs have declined too, private and public investment in real estate has declined considerably as a share of GDP in the last 60 years. All the while Trump falsely keeps claiming the economy is doing great.
China’s economic growth has slumped to a 27-year low with the ongoing trade war with U.S. As per the latest National Statistics of China report, China’s GDP is sustained at 6% with the Industrial Production Growth at 5.8%. The Retail Growth and Fixed Investment Growth are at 7.5% and 5.4% respectively. All these factors have dampened China’s economic outlook.
The ongoing Trump – Xi Jinping trade war has not only affected the two great economies of the world, but also created problems for the global economy. The tariff war has slowed down China’s domestic demand for goods like cars and other things. China’s pork industry was affected by a viral epidemic, which has also created a dent in the economy.
China’s factory output has increased by 5.8% in September along with retail sales’ increase by 7.8%. Investment has grown by 5.4% in 2019 according to National Bureau of Statistics of China. China is currently not taking any bold steps to ramp up growth, because China has been anticipating slower growth rate for years. The Chinese government has been managing carefully the gradual slowdown of its economy, unlike other countries. Analysts do insist that China’s economy is still growing twice the global average, maturing and transitioning to one driven by domestic consumption rather than exports.
Japanese government’s hike of sales tax from 8% to 10% has deteriorated consumer spending drastically in recent times. The government was forced to take the bold steps having delayed the move twice. The move became mandatory to fix the nation’s falling finances. Consumer sentiment has dampened after the sales tax increase. Cost of living in Japan is very high as compared to other countries.
In spite of the higher tax rate, the economy is heading towards recession, because of bitter trade tensions. The government has set aside $18.49 billion for discounts and shopping vouchers and public works spending. $2.77 billion will be spent on tax breaks for car and housing purchases to boost the domestic consumption. In spite of the stimulus, economic activity will be affected in a significant manner.
Japan’s exports have slumped for the 10 consecutive months to cause major concern for the government. In September 2019, exports slumped to 5.2% from last year. The trade war between the two giants US – China has created a dark outlook for Japan’s economy. Car sales and aeroplane parts to America and semiconductor production equipment to South Korea have decreased considerably. Exports in volume fell by 2.3% in the year to September. It is the second consecutive months of decline.
Germany, the fourth largest economy in the world is heading towards recession. Transportation infrastructure is in bad shape, because Germany has not invested since many years. The auto industry and metal production has fallen drastically to stoke fears in the Eurozone. Industrial output has dropped by 1.5% in the month and the continued plunge will be dangerous for the German economy. The trade war between Trump and Xi Jinping has resulted in recession in the manufacturing sector. It is likely to continue further.
China and America are two of the most countries for German manufacturers. The German government in all likelihood will trim the growth forecasts for coming months. In the second quarter, production in Construction fell by 1.1%, while energy output dropped by 5.9%. The industrial growth is currently slowing down comparatively. The auto industry has been badly hit because of new emissions measurement standard and decreasing demand from other countries. The German economy is expected to grow by an amazing low of 0.5% in 2019. However, it is likely to bounce back in 2020 with a 1.5% expansion.
The fifth largest economy in the world is heading towards recession in the most critical manner. As per the Indian government statistics, nation’s GDP fell to a six-year low of 5% in the first quarter of this fiscal year. Industrial growth output rate fell by 0.5% in eight core industries – Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizer, Steel, Cement and Electricity – in the month of August 2019. The Coal industry recorded a negative growth of 8.6%, followed by Crude Oil at 5.4%, Natural Gas at 3.9%, Cement at 4.9% and Electricity recorded a negative growth of 2.9%.
The auto industry, airline industry, real estate, banking sector, construction sector and the retail industry are all facing the brunt of recession. It is indeed to noteworthy to see as many as 421 realty firms announcing bankruptcy in less than a year since the big guns like IL&FA going kaput. The casualties are likely to increase even further. A total of an all-time high of 12.76 million houses were unsold in India’s top 30 cities. Demonetisation is still being blamed for the massive decline in the real estate sector.
Banking woes with ever-increasing gross NPAs stands at 8.06 lakh crore as on March 2019. The telecom sector is also facing tremendous pressure of competition between Jio, Airtel and Vodafone. The auto industry has plunged drastically. In July 2019, passenger vehicles decreased by 31% in its ninth consecutive months of fall. This massive fall has impacted various segment of the industry. Big carmakers are struggling to sustain their huge loss and increase in price. The economic slowdown has forced the consumers to shy away from buying new vehicles.
The high rate of unemployment at 3.6% in various sectors is worrisome for the Indian government, who are clueless to solve the problem. Millions of people have been laid off in various industries to survive in this downturn period. Salaries of working class have remained stagnant for years, pushing the lives to struggle even further.