In this article, we look at 20 countries with the lowest rate of economic growth in 5 years. You can skip our detailed analysis on countries with a struggling economy and head over directly to the 5 Countries With Lowest Rate of Economic Growth in 5 Years.
Gross Domestic Product (GDP) is a widely accepted metric to gauge the size and health of a country’s economy. The global economic or GDP growth is projected to drop from 3.3% in 2022 to 2.7% in 2023 according to the OECD. However, it is forecasted to rebound in 2024 to 2.9%, driven by improving consumer sentiment, China reopening itself for international trade, and declining energy prices.
Several economies around the world have experienced negative growth over the last few years due to multiple factors, ranging from the coronavirus pandemic to regional conflicts and economic sanctions. Countries where revenue from tourism contributed a major chunk of the GDP suffered as international borders closed to prevent the spread of coronavirus. Tourism is the world’s third largest category of exports after fuel and chemicals, and represents between 10-20% of the revenue for a number of countries such as Sri Lanka, Barbados and Fiji. In the US, the Bureau of Labor Statistics estimated that about 8 million jobs were lost in the hospitality industry due to the pandemic. Marriott International, Inc. (NASDAQ:MAR) announced in April 2020 the temporary closure of 7,300 of its hotels across the world after the company registered a 6.6% drop in revenue in the first quarter of the year. This equated to nearly 25% of all Marriott International, Inc. (NASDAQ:MAR) hotels.
On the other hand, a number of countries in Africa and the Middle East remain engulfed in armed conflict, while Russia’s invasion of Ukraine has shocked the economic landscape across the world, resulting in disruption of the global supply chain. According to a report, over 60% of Ghana’s steel and iron ore is imported from Ukraine. The construction industry in the African nation has been severely affected by Russia’s invasion. Kenya is facing a looming bread shortage, since it imports 30% of its bread from both Russia and Ukraine, while Cameroon, which is reliant on Russia for its fertilizers could face a dire impact on its crop yields and subsequently food security in the country.
Economic sanctions have also hurt certain countries like Venezuela for example. What was once a country oozing in oil and a lucrative market, is now one of the worst performing economies in the world because of high debt and poor policies. Western sanctions against the regime have made the situation further complicated. Last year, Norway’s Equinor ASA (NYSE:EQNR), a partner in joint ventures with Venezuela’s state-owned oil company PDVSA decided to sell its shares and leave the country. In 2021, Equinor ASA (NYSE:EQNR) also exited Petrocedeno, a flagship oil project in the country. Sanctions by the United States on PDVSA had limited the number of markets receiving Venezuelan oil, which restricted access to capital and cash flow for the investors. Other oil companies leaving Venezuela along with Equinor ASA (NYSE:EQNR) included France’s TotalEnergies and Japanese firm Inpex Corporation.
Methodology
We have ranked 20 countries with the lowest rate of economic growth in 5 years by using real GDP growth rate data released by the International Monetary Fund (IMF) for the years 2018-2022. Countries are ranked in descending order of the averages of their real GDP growth during these five years. In cases where two or more countries had similar rates, we ranked them using 2022’s numbers as a tie-breaker – the country with the least growth or highest negative growth outranking the other.
If interested, you can also take a look at our recent article, 20 Countries With Highest Rate of Economic Growth in 5 Years and read about Guyana’s staggering rise in the last few years, as well as other countries that are growing economically at a rapid rate.
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Let’s now head over to the list of countries with the lowest rate of economic growth in 5 years.
20. Solomon Islands
Average Real GDP Growth (2018-2022): -0.74%
Solomon Islands, a country in Oceania, is located in the South Pacific and is home to a number of World War II sites. The nation’s economy has experienced negative growth since the pandemic struck in 2020. In 2022, the economy contracted by 4.1%.
19. Angola
Average Real GDP Growth (2018-2022): -0.74%
Angola is a country in southern Africa that is known for its varied terrain and tropical beaches. The Angolan economy has been on decline since the last five years, and that is likely to have had some effect on ETFs with Angolan exposure, such as American Century Emerging Markets Bond ETF (NYSE:AEMB), whose price has dropped by 26% since July 2021, and Virtus Stone Harbor Emerging Markets High Yield Bond ETF (NYSE:VEMY) which has a 2.65% allocation in Angola and has seen its value plummet 6.52% in the last six months.
18. Micronesia
Average Real GDP Growth (2018-2022): -0.84%
The Federated States of Micronesia is an Oceanic country on the western Pacific Ocean, comprising four islands. It is one of the smallest countries in the world and is famous for its ancient ruins and beaches. Like the Solomon Islands, Micronesia’s real GDP has been shrinking since Covid-19 caused tourism to come to a halt.
17. Fiji
Average Real GDP Growth (2018-2022): -0.88%
Fiji is a country in the South Pacific with more than 300 islands, and a population of close to a million people. Fiji’s economy has been bolstered after the resumption of tourism in the country. Real GDP growth in Fiji was estimated to be 14.5% in 2022, according to the IMF, after contracting 17% and 5.1% in 2020 and 2021, respectively.
16. Barbados
Average Real GDP Growth (2018-2022): -0.92%
Barbados is an island nation in the Caribbean that is also an independent member of the British Commonwealth. In 2022, its real GDP growth was estimated to be 10%, which is the sharpest growth in the region since 1975. It ranks among countries with the lowest rate of economic growth in 5 years due to high contraction in the economy during the pandemic.
15. Republic of Congo
Average Real GDP Growth (2018-2022): -1.14%
Situated in Central Africa, the Republic of Congo, which is also known as Congo-Brazzaville, is popular for its rainforests. The country’s economy contracted 6.2% in 2020 but has experienced growth over the last two years. Congo is rich in natural deposits of iron ore and diamonds.
14. Yemen
Average Real GDP Growth (2018-2022): -1.16%
Yemen is the second poorest country in the MENA region, and has been embroiled in a civil war for the past decade which has further shattered its struggling economy. After experiencing negative growth over the last several years, the economy showed signs of expansion in 2022, having grown 1.5%.
13. Haiti
Average Real GDP Growth (2018-2022): -1.36%
Haiti is a Caribbean country that ranks 13th on the list of countries with the lowest rate of economic growth in 5 years. In 2022, the economy contracted by 1.7%. The country relies on trade with neighboring United States and Dominica. It is a predominantly agriculture-based economy.
12. Sri Lanka
Average Real GDP Growth (2018-2022): -1.36%
Sri Lanka is facing one of its worst economic and political crises in history, which has already culminated in mass riots and the president fleeing the country before protesters stormed his residence. The government in March 2022 was forced to even cancel school exams as the country had run out of paper. iShares Frontier and Select EM ETF (NYSE:FM) and Global X Next Emerging & Frontier ETF (NYSE:EMFM) are equities that maintain exposure in Sri Lankan stocks. Expolanka LLC, John Keells Holdings PPLC, Sampath Bank PLC and Commercial Bank of Ceylon PLC are the four Sri Lankan stocks in iShares Frontier and Select EM ETF (NYSE:FM).
11. Trinidad and Tobago
Average Real GDP Growth (2018-2022): -1.40%
Trinidad and Tobago is a Caribbean dual-island state located near Venezuela. The country’s GDP has rebounded and entered positive territory after experiencing negative growth in 2020 and 2021 during the pandemic. VanEck Emerging Markets High Yield Bond ETF (NYSE:HYEM) is the top ETF with exposure to the island state. However, its value has dropped by 22% in the last five years.
10. Sudan
Average Real GDP Growth (2018-2022): -2.08%
Sudan is located in northeast Africa. It is one of the poorest countries in the world with more than 40% of the population living below the poverty line. Fighting between the Sudanese National Army and Rapid Support Forces (RSF) have ravaged the country, displaced over a million people, and left the economy teetering on the edge of a total collapse.
9. Suriname
Average Real GDP Growth (2018-2022): -2.26%
Suriname is a country in South America, with an estimated GDP of $3 billion. The country is bordered by Brazil, Guyana, French Guiana, and the Atlantic Ocean. The economy is rebuilding and grew at 1.3% in 2022 after contracting 15.9% in 2020 and 2.7% in 2021.
8. Samoa
Average Real GDP Growth (2018-2022): -2.46%
Next on our list is another Oceania country, Samoa, which is home to a small population of roughly 200,000 people inhabiting several small islands. The Samoan economy shrank by 6% in 2022. Tourism and agricultural exports are the major source of income for the island nation.
7. Libya
Average Real GDP Growth (2018-2022): -3.46%
Libya was torn apart by the civil war between 2014 and 2020 and the country is still reeling from the aftershocks of the conflict, with the GDP contracting 12.8% last year. Some equities that maintain exposure to stocks listed in Libya include VanEck Brazil Small-Cap ETF (NYSE:BRF) and iShares MSCI Brazil Small-Cap ETF (NASDAQ:EWZS). Both ETFs have retained their value over the last five years and not been significantly affected by the volatility in Libya. The reason for this is likely that both VanEck Brazil Small-Cap ETF (NYSE:BRF) and iShares MSCI Brazil Small-Cap ETF (NASDAQ:EWZS) have less than 0.50% of weightage in Libyan investments.
6. Equatorial Guinea
Average Real GDP Growth (2018-2022): -3.50%
Situated in Central Africa, Equatorial Guinea is sixth on the list of countries with the lowest rate of economic growth in 5 years. The country’s GDP shrank for four years straight between 2018 and 2021, before recording a positive growth rate of 1.6% in 2022.
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Disclosure: None. 20 Countries With Lowest Rate of Economic Growth in 5 Years is originally published on Insider Monkey.
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