World economy

The main trends of the global economy

Globalization gives way to protectionism as G7 can no longer dominate BRICS

The era of globalization and free trade in 2023 is replaced by "securonomics," which puts national interests above economic efficiency, and this shift poses big problems for investors.

"Globalization as we once knew it is dead." This scathing assessment, made in May Washington 2023 in Rachel Reeves, Labour's shadow chancellor of the exchequer, Britain is the simplest summary yet of what happened to the framework that has defined global economic policy for the past 30 years.

In the era of free trade and financial liberalization, politicians danced to the tune of economists. Now it's the opposite.

The world is being reorganized into competing - albeit still connected - blocs that reflect the results of the UN vote on Russia's operation in Ukraine.

The final statement of the principles defining the new political landscape was made in the United States at the end of April 2023. It is noteworthy that this was done not by the US Treasury Secretary or the US Trade Representative, but by the country's chief securocrat Jake Sullivan. President Joe Biden's national security adviser explained that the era of unconditional support for free markets is over. Industrial policy is returning to the United States. The state will explicitly subsidize "specific industries that are fundamental to economic growth (or) strategic in terms of national security," Sullivan explained. That principle is at the heart of the Biden administration's two major economic laws in the previous twelve months - the CHIPS and Science Act and the Inflation Reduction Act, which aim to support the U.S. semiconductor industry and green power, respectively.

At the same time, at the international level, free trade is no longer the main goal for the G7 countries, since they were not ready to compete with the BRICS countries and, above all, with China. Now they are forced to close their own markets. Providing supply chains will be a priority over minimizing costs, and bilateral or regional trade agreements will be aimed at supporting foreign and environmental policies. Offshoring will be replaced by friendshoring - the desire to supply parts and industrial goods from friendly countries. Sullivan's 5,000-word speech to the World Trade Organization focused on just three sentences.

In the long run, some argue, the new statism will pay even bigger dividends. As Jacob Soll argues in The Free Market: The History of the Idea, a timely history of the struggle between liberalism and protectionism published in 2022, the era that the world experienced after the collapse of the USSR is an exception. As early as the 17th and 18th centuries, economic politicians such as the French statesman Jean-Baptiste Colbert and the first US Secretary of the Treasury, Alexander Hamilton, recognized the need to restrain the effectiveness of free markets by state support for industries important to national security. Soll notes that even Adam Smith, the Scottish economist who celebrated the "invisible hand" of market forces, advocated for the defence of England's naval industry. Soll, a professor at the University of Southern California, explains that securonomics, not free-market liberalism, was at the heart of most of the great economic growth stories of the past.

The modern global economy, however, faces challenges that Colbert or Hamilton would hardly recognise. One particularly obvious question is whether national security priority aligns with another major economic policy shift of the past two years: an attempt by central banks to normalize monetary policy after more than a decade of ultra-low interest rates.

The transition from market to state in the real economy occurs just as politicians are trying to restore market distribution in the financial sphere. Christine Lagarde, president of the European Central Bank, in April 2023 gave a frank assessment of the serious problems posed by this seemingly inconsistent combination. The enviable results of the independent central banks of the G7 countries in achieving low and stable price inflation targets over the past three decades largely depended on two factors, Lagarde explained.

The first is the easing of supply-side restrictions caused by an inexorable march of trade liberalization and the entry into the global workforce of hundreds of millions of workers from the countries of the former Soviet bloc, China and other emerging markets. This made demand a point of applying forces to inflation, allowing central banks to regulate it with interest rates. The second factor was the dominance of the US dollar in the global financial system. This supported a stable international monetary architecture and a predictable transfer mechanism for central bank policy.

Securonomics is cutting down both of these foundations of the modern central bank. Hard borders, high tariffs and confusing supply chains have put trade disruptions and labor shortages back at the heart of the inflation process, undermining central banks "ability to hold back price increases.

Meanwhile, the dollar-based global financial system is gradually giving way to a more multipolar future. China seeks to internationalize the yuan. The decision by the United States and Europe to impose sanctions on Russia, using central bank reserves and payment systems, accelerated the development of alternatives. Saudi Arabia said it could start accepting oil payments in currencies other than U.S. dollars. None of these events are going to destroy the US dollar. But all of them, ultimately, reduce the effectiveness of the monetary policy of the G7 countries.

Does securonomics herald a new era of investment opportunities, as the newly emboldened policymakers assure us, or are the economists behind the old "Washington Consensus" right that it will lead to collapse? Perhaps the answer lies in both options. "It's all like the 17th and 18th century," says Professor Soll, "which ends with economic innovation, growth - and world war."

The Battle for Technology, Not Territory

Main article: Research and development (R&D, R&D global market)

By 2023, the world does not wage wars over territories within the framework of the concept of the 19th and early 20th centuries, but the main ones are technology and control over value addition/control over production chains, financial flows and the creation of intellectual property. The battle for better minds and keeping the creative class in the area of ​ ​ its own responsibility becomes the main task that determines economic sovereignty.

In today's world, it is almost impossible to buy technology for any money, at least those technologies that have demand and which bring profit. Technology transfer takes place only inside friendly blocks. Therefore, technologies can only be created by themselves.

Economic and, as a result, political dominance is achieved by those who are able to generate breakthrough technologies by curbing the existing, transitional and future technological order.

Global R&D spending is distributed among a limited number of industries in the so-called "knowledge economy."

The transition to the digital world dictates new laws of the economy

In the industrial and even post-industrial world, the usual concepts describe quite well the logic of the functioning of society and the economy, but not in the information society, Spydell Finance wrote in December 2023.

What are the main trends and features of transformation?

• Deep degree of automation of production and business processes - affects labor productivity, return on capital, return per unit of resources used.

• Improving the quality of management through real-time access to a huge array of information with algorithms for structuring and processing this information. This results in improved accuracy, speed and quality of control.

• Improve resource utilization through better planning, resulting in streamlined business processes, increased efficiency and margins.

• Faster vulnerability search and risk mitigation through the use of advanced information systems and management risk algorithms.

• Increase the speed of progress with the power of computing resources, high software development and the use of AI.

• Improving education and skills of the workforce. Technology provides new opportunities for education and training, which contributes to the development of a skilled workforce.

All this collectively creates a kind of safe and high-margin environment that does not work according to the economic rules of the analog world.

The greater the shift to the digital world, the greater the integral resilience by reducing costs, improving quality, accuracy and speed of management/decision-making, and increasing overall efficiency. The main features of this business: lack of debt, ultra-high margins, prohibitive income per employee and double-digit growth rates.

At the same time, in 2024 there remains a fairly significant layer of the traditional economy, which is vulnerable and has a full range of problems. The main features: high debt burden, low margin, low return on capital, low wages, zero growth rates.

The higher the share of the digital economy, the higher the ability of the transmission of superannuation along the pyramid of resources to weaker links in the chain.

Global debt

2024: Aggregate non-financial debt of the largest countries

Under total non-financial debt, the total obligations of business, the state and the population in loans and bonds are assumed.

By the end of the first quarter of 2024, the exorbitant debt burden in China was 290% of GDP, and among the largest countries the higher debt burden in Japan was 400%, in France - 315%, the Netherlands - 316%, Belgium - 294%, Switzerland - 297% and Singapore - 346%.

This is the case when the amount of debt matters. In the United States, it is necessary to serve over $70.7 trillion, in China - $51.1 trillion, in the Eurozone - $37.2 trillion, in Japan - $15.8 trillion, in France - $9.7 trillion, Germany - $8.1 trillion, Britain - $7.9 trillion, Canada - $6.7 trillion, India - $6.5 trillion, and in Italy - $5.5 trillion, all other countries have obligations less than $5 trillion.

Before the COVID-19 pandemic, China had commitments of 34.5 trillion, in 2015 - 24 trillion, in 2010 - 10 trillion, and in 2007 - less than 5 trillion. China has lost ten in 15 years!

According to the experience of countries with developed economies, the maximum depth of implementation of non-financial debt is 250-270% with structural transformation - replacement of private public debt.

China has already reached the threshold, as Japan once did (the level of 300% in Japan 15 years ago), when the ability to reproduce debt sharply decreases with the aggravation of debt problems and the exhaustion of the development model through debt expansion.

The United States has practically not changed its debt burden since the 2008-2009 crisis, stabilizing total non-financial debt at 255% of GDP (in 2010-2019 it averaged 252%), in the Eurozone there is a decrease to a minimum from 2009-236% (in 2010-2019 it was 262%).

A similar trend is observed in Britain, whose debt burden fell to 233% of GDP (at least from 2008 to the fiscal expansion cycle), compared with 266% in 2010-2019.

In Australia, debt has stabilized by 221% of GDP, which is comparable to the long-term level in 2010-2019 about 219%, and in Canada debt has grown to 311% of GDP, which is 29 pp higher than in 2010-2019.

2023

Countries with the highest external debt

By the end of 2023, the United States ranked first on the list of countries in terms of total external debt. It reached approximately $35 trillion, or $76,426 per capita. Such data are given in the materials with which TAdviser got acquainted in early August 2024.

"External debt" refers to a general public and private debt owed to non-residents that is repayable in internationally recognized currencies, goods or services. At the same time, public debt is money or loans at any government level - from central to local. In turn, private debt is money or loans owed to households or private corporations.^[1]

External debt includes debt on government securities; loans issued to the state by external creditors; state guarantees for loans received abroad by resident organizations; debt on foreign trade operations of budgetary organizations. The list of countries with the highest external debt includes:

Debt growth of $15 trillion to a record $313 trillion: US, France and Germany anti-leaders of lending

In 2023, global debt grew by more than $15 trillion, reaching a new record level of $313 trillion. 55% of this growth fell on developed markets, mainly in the United States, France and Germany.

2021: Up to $296 trillion

In the second quarter of 2021, global debt rose sharply by about $4.8 trillion to a record level of $296 trillion.

2020: Global debt $277 trillion or 365% of global GDP

According to the Institute of International Finance (IIF) for November 2020, world debt by the end of 2020 will reach a record $277 trillion, which will amount to 365% of world GDP.

Total US debt will reach dollars $80 trillion in 2020, compared to $71 trillion in 2019.

2019: $188 trillion or 230% of global GDP

In November 2019, world debt, according to the IMF, reached a record of $188 trillion and more than doubled the volume of world GDP.

Of this amount, two-thirds is private sector debt. The world has not seen this since World War II.

IMF Managing Director Kristalina Georgieva warns that a new credit boom could threaten the economic stability of the world.

188 trillion, dollars which is 230 percent of the cost of all goods and services on the planet. Moreover, an unstable economy is considered already with a debt exceeding 80 percent of GDP.

Global public debt

2024: State debt of countries of the world exceeds $100 trillion

Global public debt in 2024 will exceed $100 trillion, the IMF said in October 2024.

The fund is calling on big economies to take tougher action as debt approaches 100% of global GDP by the end of the decade.

2023: A sharp rise in public debt in developing countries

In early January 2024, investors warn governments around the world about "unbearable" levels of public debt. Out-of-control budget deficits are once again becoming a concern for markets.

The deficit "is out of control, and the real story is that there is no mechanism to bring it under control," said Jim Silinski, head of global fixed income at Janus Henderson.

In 2023, the debt crisis is relevant not only in economically developed countries. Over the past 10 years, public debt in developing countries has grown extremely against the background of financial fragmentation and an increase in the cost of servicing debts.

Since 2013, the consolidated public debt of China (taking into account the debts of the central government and regional budgets) has grown from 37 to 83% of GDP, in India the growth of public debt from 67 to 82%, in Brazil the growth from 60 to 88%, in Mexico the growth from 44 to 53%, in Egypt the increase from 80 to 93%, and in Pakistan from 58 to 77% of GDP.

Also, the debt problem is observed in Argentina, where debt increased from 44 to 90%, in Thailand from 43 to 62%, in Malaysia from 56 to 67%, in South Africa an increase from 40 to 74%, in the Philippines the public debt increased from 44 to 58%, and in Colombia an increase from 38 to 55% of GDP.

The most serious problem is in China, India, Brazil and Egypt, where public debt is approaching 100% of GDP. In Russia, public debt is one of the lowest in the world - 21% of GDP (the maximum debt burden since 2004).

For comparison, the consolidated public debt for the largest developed countries:

• Japan - 255% of GDP
• Italy - 144%
• USA - 123%
• France - 110%
• Spain - 107%
• Canada - 106%
• Britain - 104%
• Germany - 66%
• South Korea - 54%,
• Australia - 52%.

What is the vulnerability of developing countries? Since 2013, the fragmentation of transnational capital has been increasing, where developed countries are closing in on themselves and developing a cross-funding mechanism (cross-financing of allies), and developing countries are extremely divided and increasingly rely on residents, attracting capital from the domestic market. For example, in Russia, financing of new OFZ issues is almost entirely at the expense of residents.

Secondly, interest rates in developing countries are higher and from 2021 the public debt of 50-70% in developing countries (with the exception of China) is equivalent to 120-170% in developed countries.

Plus, a less developed and capacious financial market, less depth and diversification of the economy.

2022

Singapore and the United States became anti-leaders in public debt per capita. Russia in 94th place

The largest indicator of public debt per capita in 2022 was recorded in Singapore, the United States and Japan, while Russia in this value was in 94th position. This is evidenced by the results of a UN study, released in mid-July 2023.

According to RIA Novosti, in Singapore, the national debt per capita in 2022 reached $117.4 thousand. In second place in the ranking of anti-leaders are the United States - $93 thousand, and Japan closes the top three, where the figure is $88.4 thousand. This is followed by Canada and Belgium, whose public debt per capita amounted to $58.9 thousand and $52.6 thousand, respectively. The top ten also included Iceland ($51.2 thousand), Italy ($49.2 thousand), France ($47.1 thousand), Ireland ($47.1 thousand) and the United Kingdom ($46.6 thousand).

About 3.3 billion people live in countries that spend more on paying interest on debt than on education or health care. But since most of this unacceptable debt is concentrated in poor countries, it is believed that they do not pose a systemic risk to the global financial system, said UN Secretary General Antonio Guterres.

According to the UN, Russia in 2022 took 94th place in terms of public debt per capita with an indicator of $2.98 thousand. Among the BRICS countries, China showed the greatest negative result - approximately $9.9 thousand. India with an indicator of about $2 thousand is in 112th position. The EAEU member states, as RIA Novosti emphasizes, occupy modest positions in public debt per capita. In particular, Armenia has a value of $3.2 thousand - this corresponds to the 90th line in the list. Belarus with an indicator of $3.1 thousand took the 91st line, and Kazakhstan with $2.7 thousand - 99th place. In Kyrgyzstan, in 2022, the national debt per capita was $871 - 139th position.^[2]

The volume of global public debt reached a record $92 trillion

In 2022, the volume of global public debt reached $92 trillion, which is a new record high. This was announced on July 12, 2023 by UN Secretary General Antonio Guterres.

Developing countries are reported to account for a disproportionate portion of that amount. Against this background, the share of private creditors is growing, which set prohibitive interest rates for many states. On average, African countries pay four times more for lending than the US, and eight times more than the richest European countries. The International Monetary Fund (IMF) reports that 36 states are listed in the so-called "debt list," which includes countries already in crisis or on the verge of such.

As Guterres noted, a total of 52 countries - almost 40% of the developing world - are experiencing serious debt problems. He said that even if it seems that this situation reflects little in the markets, ordinary people suffer primarily. The fact is that the poorest countries are often forced to choose between servicing their debt and providing services to the population.

About 3.3 billion people - almost half of humanity - live in countries that spend more on paying interest on debt than on education or health care. When countries are forced to take loans so that their economies survive, debt becomes a trap that leads to a further increase in debt, the UN Secretary General said.

Poor governments, as they say, do not have enough funds to invest in development or renewable energy. A similar situation is one of the results of inequality embedded in an outdated global financial system. Therefore, large-scale reforms are needed to eliminate the existing world problems.^[3]

2021: Up 7.8% to $65.4 trillion

In 2021, the global public debt grew by 7.8% to $65.4 trillion, with an increase in borrowing observed in all countries covered in the study.

Meanwhile, the total cost of servicing debt fell to $1.01 trillion, that is, the actual rate was only 1.6%, according to a CNBC study.

In 2022, global spending on servicing public debt is expected to jump by 14.5% to $1.16 trillion.

Analysts at Janus Henderson believe that Britain is stronger than other countries will face an increase in borrowing costs by raising interest rates of the Bank of England and a significant amount of public debt with floating rates tied to inflation.

European countries will also actively place government bonds due to the need to sharply increase government spending on defense in the light of the war in Ukraine, said Bethany Payne, portfolio manager of the company.

By July 2020, it became known that the total sovereign public debt of all countries in 2020 for the first time in history will reach 101.5%.

This forecast is contained in a joint article published by the International Monetary Fund (IMF) by IMF Chief Economist Gita Gopinat and Fund Budget Director Vitor Gaspard.

2020: National debt of all countries reached 98% of world GDP - IMF

Public debt of developed economies returned to record level of World War II - GDP 123.9%

2019: Global Public Debt Structure by Country

Global Public Debt:

• 2008: $31tn
• 2018: $66tn

Money supply

2024: Rise to record $107 trillion

In October 2024, the global money supply reached an all-time high of $107 trillion.

World GDP

Main item: GDP - Gross Domestic Product (GDP)

2023: Global GDP growth of 2.6%

Global economic growth in the first half of the 2020s may be the weakest in 30 years, the World Bank wrote in January 2024. World GDP in 2024, according to the bank's forecast, will grow by 2.4%, in 2025 by 2.7%. At the end of 2023, it amounted to 2.6%.

Since 2020, in a short period of time (only 4 years), a double economic shock has occurred: the COVID-19 crisis in 2020, the uneven recovery in 2021 in the countries of the world and the inflation shock of 2022-2023, the energy crisis in the countries of oil importers and the partial implementation of the debt crisis 2022. In Russia, the sanctions shock 2022 and subsequent events.

Although the average annual growth rate decreased in most countries compared to 2010-2019, the economic results turned out to be surprisingly strong - almost everything is in the black, which is primarily due to powerful and extraordinary stimulating measures 2020-2021 and increased state budget deficits for this period.

Among the leading 50 countries of the world in terms of GDP, only 3 countries are in the red (2023 compared to 2019): Iraq - 6.5%, Thailand - 0.4%, Czech Republic - 0.3%. Ukraine, obviously, is not taken into account due to hostilities and the inability to accurately calculate GDP.

In Russia, an increase of 5.6%.

GDP growth from 2020 to 2023 among countries neutral to the Russian Federation:

• Bangladesh - 25.6%,
• Turkey - 25.2% (the adequacy of calculating real GDP is a big question),
• China - 20.2%,
• Vietnam - 19.8%,
• India - 19.2%,
• Egypt - 18.3%,
• Iran - 17.6%,
• Indonesia - 12.4%,
• Pakistan - 11.1%,
• Nigeria - 8.1%
• Saudi Arabia - 8.1%
• Brazil - 7.4%,
• Mexico - 3.7%,
• SOUTH AFRICA - 0.9%.

It is possible to note very high growth rates in Israel - 17%, Taiwan - 14.7% and Singapore - 10.7%.

Among other countries, the accumulated GDP growth for 4 years amounted to: USA - 8.1%, - Japan 1.2%, - Germany 0.7%, - Britain 1.8%, - France 1.7%, - 3.5 Italy %, - 7.7% South Korea , - 4.9%, Canada - 2.5%, Spain - 9.5%, - 6.6%, Australia Netherlands - 6.6%, - Switzerland 5.8%. Belgium

GDP growth for 4 years among developing countries from the unfriendly camp to the Russian Federation: Poland - 10.5%, Romania - 8.7%, Hungary - 5.9%, Greece - 5.8%.

The implementation of crisis processes is not yet taking place, the global economy is relatively stable.

2022

Estimate of the volume of world GDP - $101.6 trillion

The share of the United States and its allies in global GDP on PPP fell to 43% due to the growth of China, India and Indonesia

The weight and importance of countries unfriendly to Russia is steadily decreasing - this is an indisputable fact. After the collapse of the USSR, unfriendly countries formed 59% of world GDP at purchasing power parity, and this share remained relatively stable until the beginning of the 21st century.

It took 10 years for the world to "grope" new balances and build a configuration for organic leading growth. From the end of 1999 to 2010, the share of unfriendly countries in global GDP dropped sharply from 58 to 47%! Almost 1 pp per year - very high rates.

Over these 10-11 years, African countries increased their share in world GDP by 0.62 percentage points, the countries of the Middle East, taking into account Pakistan, increased their share by 0.67 percentage points, Russia and the CIS countries, including Ukraine and Georgia, increased their share by 0.9 percentage points largely due to the monstrously low base of 1999 (the bottom of the ten-year crisis).

Latin America, taking into account Mexico, reduced its share by 0.67 percentage points, and the main contribution to increasing importance in the global economy was made by "Asian monsters" - China, India, Indonesia, the Philippines, Malaysia, Thailand and Vietnam, increased importance by 9 percentage points (!), According to the IMF and Spydell Finance's own calculations.

In 2011, the Arab Spring occurred, triggering related processes for many years. As a result, Africa and the Middle East significantly lost momentum. From 2010 to 2022, Africa lost a share of 0.17pp, and even then due to population growth, while the quality of growth deteriorated sharply. The Middle East and Latin America lost a share of 1.3 percentage points! Russia and the CIS countries minus 0.7 pp, and Asian monsters plus 7 pp.

It is curious that from 2012 to 2018, unfriendly countries remained important in the global economy due to the post-crisis recovery and fragmentation of the Middle East, Africa, Eastern Europe after a series of events on political destabilization, sanctions and restrictions on technological cooperation with Western countries.

At the end of 2022, unfriendly countries occupy 43% of world GDP and lose their share due to the advanced development of Asia - mainly China.

G7 countries must accept that they cannot govern the world. American hegemony and the group's economic dominance have gone down in history, the Financial Times wrote in May 2023.

The share of Russia in world GDP dropped to 2.87% - this is at least since 1998. In 1990, the RSFSR had a share of 5.1%. In 2000, climbing began with 3%, in 2008 - recovered to 3.7%, before the Crimea it was 3.5%, and before the SVO about 3-3.1%.

2.8% is, of course, very little. The trend shows that Russia has not increased its economic influence in relation to the world since 1998, but here, with what focus to look at?

If we take the largest developing countries, Brazil, Mexico and South Africa record their 30 summer lows. Saudi Arabia and Iran are in the stabilization phase, but at 30-year lows.

In Iran, it is clearly visible how sanctions and isolation affected, when since 2012 Iran has rapidly reduced its share of world GDP from 1.5 to 0.9-1%, with compression occurring for 7 years, and COVID-19 and the energy crisis allowed Iran to stabilize the economic situation relatively global.

Thailand is in a difficult situation, where the post-covid effect led to a contraction of the economy to 0.9% - a 30-year minimum.

Population growth does not affect Nigeria's weight gain (since 2015 in the "compression" phase), because the quality of growth is disgusting, too tied to the energy sector.

With China, everything is clear - from 4% in the early 90s to 19% by 2022, but in 2022 the first significant scrap of growth momentum. On the other hand, India is intercepting growth and increasing its presence in the global economy.

The success story can be noted in, in Turkey, Indonesia and Philippines especially should be noted, Vietnam which is growing according to the "Chinese model." Labor China in is becoming too expensive and low-cost and labor-intensive production China is throwing into Vietnam.

A good situation in Malaysia, which at a high base retains its presence in the global economy, that is, it is growing at the pace of the global economy, but without advanced development.

Growth in Bangladesh - base effect and population.

Deceleration forecast for decades due to slowing population growth

On the horizon until 2075, the global economy will slow, economists at Goldman Sachs said in December 2022. This is due to a decrease in population growth. Over the past half century, the number of people on the planet has increased by 2% per year, but now the growth has decreased to less than 1%. And by 2075, this figure will fall to almost zero, while reducing the growth rate of labor productivity.

2021: Up 5.9%

2020: 3.3% decline

In 2020, global GDP due to the COVID-19 pandemic decreased by 3.3%.

2018

Inflation

• Inflation
• Helicopter money

How rich you are compared to others

Main article: Welfare in the world

The largest companies in the world

Main article: The largest companies in the world

Stock market

• Stock market of Russia
• US stock market

2024: BRICS Clear depository system for BRICS countries begins

In October 2024, Russian Finance Minister Anton Siluanov announced the start of work on the creation of the BRICS Clear depository system for the BRICS countries.

2023: Need for a BRICS depository

Moscow Exchange considers it possible to create an international depository, the founder of which could be one of the BRICS institutions, Sergey Shvetsov, chairman of the supervisory board of the Moscow Exchange, told reporters in June 2023.

Today there are three central international depositories - Bank of New York, Clearstream and Euroclear, he recalled. "You need to create an alternative. Because when monopoly is used by some states as a method of influencing others, it is wrong. If states are not ready for infrastructure to be neutral, then there should be infrastructure competition. "

2018: Capitalization of stock markets of countries of the world

The leaders are the North American and Asian regions, accounting for almost 70% of the total capitalization.

The highest capitalization has US stock markets 30.4 trillion dollars, China 6.32 trillion, Japan 5.3 trillion.

Russian stock markets operate at 0.58 trillion.

2017: Shareholder Structure: Funds, States, Families

For 2017, institutional investors (mutual and pension funds, insurance companies) own shares, which account for 41% of the market capitalization in the world, follows from a new OECD report. In the United States, such structures account for 60% of all investments, they also dominate the markets of Great Britain and Canada. The authors of the study note that funds mainly practice passive investment based on indices without analyzing specific companies. This weakens one of the key functions of the stock market - to assess the activities of issuers and provide new companies with capital that would contribute to their growth.

In total, at the end of 2017, there were 41 thousand publicly traded companies in the world, their total value was estimated at $84 trillion. The OECD report used data on 10 thousand companies in 54 markets (approximately 90% of global capitalization). The largest market is American (36% of capitalization), followed by China (12%). Next - Hong Kong, Japan, South Korea, United Kingdom. Russia ranked 20th in this list - between Brazil and Singapore.

The second largest category of investors after institutional ones is government structures (14% of capitalization). First of all, these are central and regional governments, then sovereign and pension funds, state-owned companies.

In 8% of all companies placed on the markets, at least half of the shares are held by such structures - their total investments amount to $10 trillion. At the same time, investments of this sector in China account for 57% of the world capitalization volume owned by government agencies. The state is an important player in the markets of Saudi Arabia, Malaysia and Norway - there its share ranges from 34% to 46% (in the Russian Federation it is estimated at 32%).

The remaining large categories of investors - private corporations (including holdings), strategic individual investors (families) - account for a total of 18% of capitalization.

World trade

Online commerce in the world

Main article: Internet commerce in the world

2023

Top 10 countries with trade surplus

At the end of 2023, Russia entered the top ten countries of the world in terms of trade surplus, taking seventh place with an indicator of 121 billion dollars. This information follows from an analysis of World Bank data published in July 2024.

According to RIA Novosti, the global export of goods in 2023 amounted to $23.3 trillion, while imports reached $22.9 trillion. As a result, a global trade surplus of $365 billion was created.

Moscow, Russia

The leader in trade surplus was China with an indicator of $594 billion. In second place is Germany ($245.3 billion), and Ireland closed the top three ($178 billion). The fourth and fifth positions were occupied by Singapore and Switzerland with a surplus of 155 billion and 131 billion dollars, respectively.

As follows from the analysis, Saudi Arabia took sixth place with an indicator of 127 billion dollars, ahead of Russia. After Russia, the Netherlands ($97 billion), Australia ($83 billion) and Brazil ($81 billion) are in the top ten.

In total, there are 43 countries with a positive trade balance in the world, the total surplus of which reached $2.5 trillion. At the same time, 72 states have trade deficits totaling $2.3 trillion.

According to an analysis by the World Bank, the largest trade deficit was recorded United States of America at $1.1 trillion. In second place in this indicator is India with a deficit of $245 billion, which is more than four times less than the American value. The third place is occupied Great Britain with a negative trading balance of $232 billion. Rounding out the top five countries with the largest deficits ($88 France billion) and ($87 Turkey billion).^[4]

Global trade contraction continues at fastest pace since COVID-19

According to the results of the first half of the year, the fall in global trade occurs at the fastest pace after the COVID-19 pandemic. Demand for exports of goods is declining amid rising inflation, rising rates and spending on services.

Paralysis in WTO international trade arbitrator leads to increased protectionism

By the beginning of 2023, the global economy is moving into survival mode of the strongest, as leading countries abandon the system of trade rules created after World War II, including in the WTO format, in favor of a more restrictive and transactional approach to cross-border trade.

The "jungle law" will remain a dangerous guiding force for the global economy, which is turning into the sphere of influence of the United States and China.

2022: WTO - Global trade up 2.7%

At the end of 2022, the volume of world trade increased by 2.7%, which is lower than analysts' forecasts. For comparison: a year earlier, the growth was approximately 9.4%. This is stated in the report of the World Trade Organization (WTO), which was published on April 5, 2023.

Trade is still an indicator of the resilience of the global economy, but the industry is affected by external factors. This makes it even more important for governments to avoid fragmentation of trade and refrain from creating market obstacles, "said Ngozi Okonjo-Iweala, Director General of the WTO.

In October 2022, WTO experts predicted that the growth in world trade at the end of the same year would be at the level of 3.5%. However, these expectations were not met. The reasons are the current geopolitical situation, an increase in world commodity prices, tightening monetary policy in response to inflation and the ongoing COVID-19 pandemic, and uncertainty in the financial sector.

It is noted that in 2022 the volume of world trade in goods increased on an annualized basis by 12% - to $25.3 trillion. Commercial services brought in $6.8 trillion, which is 15% more compared to 2021. Digital services provided $3.82 trillion. In 2022, business, professional and technical services accounted for about 40% of the total costs in the digital services segment. This is followed by computer services (20%), financial services (16%), services in the intellectual property segment (12%), insurance services (5%), telecommunications services (3%), audiovisual, cultural and recreational services (3%), information services (1%).

The study notes that rising interest rates in advanced economies have exposed flaws in banking systems that, if not addressed, could lead to wider financial instability.^[5]

2020

Countries take 800 new measures to restrict imports

The states of the world in 2020 adopted about 800 different measures restricting the import of products into their territory. In total, the number of such measures over the year increased by 7.6% - to 10,952.

Global trade decline due to COVID-19

Main article: The impact of the coronavirus COVID-19 on the economies of the world

World trade volumes rose sharply in June 2020 after the lifting of quarantine restrictions due to COVID-19 in the world's largest economies and trillion injections from central banks in the United States, Europe, Britain and Japan.

Deferred demand from businesses and the population increased global trade turnover by 7.6% compared to May, follows from the CPB World Trade Monitor data.

Growth was seen in almost all countries after a huge decline in the previous three months.

However, even after the June jump in the quarter, world trade volumes remained 15% lower than last year's level and 12.5% less than in January-March, and the global trade index has fallen to the bottom since 2014.

2019

Protectionism reduces trade

The negative dynamics of global trade is explained by the simultaneous action of a number of factors.

Economic protectionism measures, which states around the world have been resorting to more and more often since 2009, are making a significant contribution to reducing trade by 2019.

According to Global Trade Alert, in 2017, 73% of G20 countries' exports were affected by certain restrictive measures. At the same time, however, the impact of protectionism should not be overestimated: the IMF in its report in April 2019 on the prospects for the global economy emphasizes that the change in the volume of cross-border trade over the past 20 years is primarily due to various macroeconomic factors, while import tariffs play a less significant role.

The general cyclical slowdown in global GDP growth also negatively affects the volume of trade between states. Among other factors that provoke a decrease in world trade, one can note the tendency to terciarize the economy (an increase in the share of the service sector in the structure of markets), the end of the commodity trade boom and the evolution of global value chains.

Shares of Sea Straits in Global Trade

2018: World's major exports

2014: Trade between non-rich countries reaches level of trade between rich

Shadow economy

Main article: Shadow economy

Net lending

Net lending is the difference between the accumulation of assets and liabilities of countries, and in order to cover the current account deficit, one must have net international lending, i.e. borrow more than invest in outside.

2023: Europe dominates in net lending, US dominates in accumulated investment

The net supplier of capital to the international market is. From Europe 2010 to 2023, net lending exceeds $8 trillion, and from the beginning of 2020 almost $2.8 trillion.

In Europe, the leading capital providers since 2010 are:

• Germany - $3.8 trillion,
• Netherlands - $1.1 trillion,
• Norway - $0.83 trillion,
• Switzerland - $0.75 trillion,
• Denmark - $0.42 trillion,
• Sweden - $0.36 trillion,
• Italy - $0.3 trillion,
• Spain - $0.18 trillion,
• Austria and Ireland at $0.1 trillion.

Outside Europe, the leaders from 2010 to 2023 are:

• China - $3.1 trillion,
• Japan - $2 trillion,
• Russia - $1.1 trillion,
• Taiwan - $1 trillion,
• South Korea - $0.9 trillion,
• Singapore - $0.9 trillion,
• Saudi Arabia - $0.87 trillion,
• UAE - $0.56 trillion,
• Kuwait - $0.5 trillion,
• Qatar - $0.4 trillion,
• Hong Kong - $0.25 trillion,
• Iran - $0.24 trillion,
• Malaysia, Thailand and Israel at $0.2 trillion.

Here are all these trillions rushing mostly to, USA,, and Britain. Canada Australia

Not to confuse net lending with gross investment. For example, in terms of gross investment, the world leaders are the United States, Britain, Japan and Germany.

The accumulated foreign assets of the United States within the framework of the international investment position are 23 times more than in Russia ($34 trillion vs $1.5 trillion), and international assets excluding ZVR are 33 times more ($33 trillion vs $1 trillion).

The creation of tension points in geopolitics and geo-economics is one of the most effective methods of rapidly concentrating international capital primarily in the United States and Britain, as the main beneficiaries of chaos in the global capital market.

The wider the STO deficit, the lower the stability of the system, since in any circumstances it is necessary to concentrate the capital of non-residents, and the maximum ability to expand the STO deficit directly rests on the ability of creditors to accumulate the STO surplus.

Countries that have a current account surplus have a certain maneuver to balance foreign economic and foreign policy activities.

Countries with current account deficits can be conditionally, either under the United States or under China. Why? More than 95% of global cross-border investment is shaped by the United States and allies plus China alone.

The most vulnerable developing countries, highly dependent on international investors, for 2023 include Turkey Brazil India:,,,,,,. Egypt Pakistan Colombia If there REPUBLIC OF SOUTH AFRICA is not enough inflow of capital of international investors, currency gaps are closed through a decrease in COR.

Any misfire is immediately out of the game, Spydell Finance wrote, because the accumulated COR may not be enough to balance the STO deficit, which is why dependence on international investors in a sense determines foreign policy (positioning in the international arena).

Foreign investment

Sovereign Wealth Funds

Main article: Sovereign Wealth Funds

Foreign direct investment in the world

Main article: Foreign direct investment in the world

Manpower

The number of people of working age, between the ages of 20 and 64, peaked in Europe in 2010. By the beginning of 2020, there were almost 12 million fewer people in this group than a decade earlier.

By 2035, Europe will have about 50 million fewer working-age people than it did in 2010. At the beginning of 2020, Europe is the only region in the world in which there is a decrease in the labor force.

Salaries in the world

Main article: Salaries in the world

Lending to the population

2020: Record low mortgage rates

Consumption in the world

Main article: Consumption in the world

Food

Main article: Food (world market)

Real estate

Main article: Real estate (global market)

Industry markets

Commodities

Main article: Commodities (global market)

Power

Main article: World power

Oil and gas production

Main article: Oil and gas production

• Oil prices

Gasoline prices

Main article: Gasoline prices

Metals

• Metallurgy in the world
• Metals (Global Market)

Chemical industry

Main article: Chemical industry in the world

Textile industry in the world

Main article: Textile industry in the world

Agriculture

Main article: Agriculture (world market)

Banks in the world

Main article: Banks in the world

Economies of countries

BRICS countries lead in share in the global economy

Taking a share of the world GDP on the PPP of the G20 countries from the IMF website, the following picture is obtained: if in the early 1990s the G7 countries gave about half of the world GDP, then in 2018 - only 30%, and the BRICS is already ahead of them in this.

However, all this is primarily due to China and India. China can already compete not only with other countries, but also with the associations of countries.

Asia

• Economy of Azerbaijan
• Economy of Armenia
• Economy of Vietnam
• Economy of Georgia
• Economy of India
• Economy of Indonesia
• Economy of Kazakhstan
• China's economy
• Economy of Pakistan
• Russian economy
• Economy of Tajikistan
• Economy of South Korea

Africa

• Economy of Algeria
• Economy of Egypt
• Economy of Nigeria

Middle East

• Economy of Israel
• UAE economy
• Saudi economy

South America

• Brazil's economy
• Economy of Chile

Europe

• Economy of Belarus
• Economy of Bulgaria
• UK economy
• German economy
• Economy of Greece
• Economy of the European Union
• Economy of Spain
• Economy of Latvia
• Economy of Lithuania
• Economy of the Netherlands
• Economy of Norway
• Economy of Poland
• Economy of Portugal
• Russian economy
• Economy of Romania
• Economy of Slovakia
• Economy of Ukraine
• Economy of Finland
• Economy of France
• Economy of Croatia
• Economy of Sweden
• Economy of Estonia

North America

• US economy

Australia and Oceania

• Economy of Australia

Chronicle

2023: WTO: Sanctions against Russia reduce the welfare of most economies in the world

On September 12, 2023, the World Trade Organization (WTO) released a report that, among other things, refers to the impact of anti-Russian sanctions on the global economy. Analysts also warned of the risks of fragmentation of the global economy and its division into blocks due to the restrictions imposed. Read more here.

Notes