In this article, we will be taking a look at the 20 worst performing economies in 2023. To skip our detailed analysis of the global economies, you can go directly to 5 Worst Performing Economies in 2023.
Global Economic Outlook
The global economy is facing a transition from the massive economic downfall during the pandemic and Russia’s war against Ukraine. The global economy was negatively impacted by the supply chain issues following the lockdown during the pandemic. However, supply chain disruptions are shrinking and businesses are improving around the world. At the same time, the monetary policies of central banks should begin to produce the outcomes, with the inflation rate expected to move back toward its target. In 2023, the global economy is expected to slowly get back on track.
The International Monetary Fund (IMF) in its July 2023 World Economic Outlook highlights that global growth will drop to 3% in both 2023 and 2024, falling from an estimated 3.5% in 2022. Global inflation will continue to decrease but at a much slower rate than initially anticipated, from 8.7% in 2022 to 6.8% in 2023. The core inflation is expected to remain moderate, and inflation forecast for 2024 has been revised upward. The main cause behind this was the COVID-19 pandemic and trade tensions after the Russia-Ukraine war. During the press briefing of the July 2023 World Economic Outlook, the following comments were made regarding economic development:
"The global economy continues to gradually recover from the pandemic and Russia's invasion of Ukraine, but it is not yet out of the woods. The COVID-19 health crisis is officially over, supply chain disruptions have returned to pre-pandemic levels, economic activity in the first quarter of the year proved resilient, and labor markets are quite tight in many places. Energy and food prices have come down faster than expected from the war-induced peaks. And financial instability following the March banking turmoil remains contained thanks to forceful actions by the U.S. and Swiss authorities.
In the medium term, overall economic growth is expected to slow down. Especially, developed economies are expected to face a slowdown in their economy, as the growth is expected to fall from 2.7% in 2022 to 1.5% in 2023. In comparison, the growth in developing economies and emerging markets is expected to remain stable at 4% in 2023 and 4.1% in 2024. According to the World Economic Forum’s Chief Economists' Outlook, the global economy seems gloomy. The majority of chief economists project moderate or strong growth in the Middle East, North Africa, and South Asia. Some of the most important economies in the world from the following regions include Saudi Arabia, United Arab Emirates, India, and Japan.
How are Businesses Recovering?
After a long halt during the pandemic, companies from different sectors are making strong progress. Most importantly, it depends on the sector in which a company is operating. Some sectors have performed exceptionally well while some have been struggling. So far in 2023, the worst performing sectors have been healthcare, energy, and utilities. For instance, Pfizer Inc. (NYSE:PFE) shares have plunged almost 30% since the start of the year, as of July 31. Whereas, consumer discretionary and technology have outperformed other sectors in the market. As we mentioned earlier, the tech sector is having a great time this year. Most investors are betting on tech stocks regardless of high inflation concerns. One of the main reasons why the tech sector has skyrocketed is the ongoing artificial intelligence (AI) hype. Alphabet Inc. (NASDAQ:GOOG)'s Google is making massive progress in AI as the customers are highly interested in its cloud services. Google's CEO Sundar Pichai believes that in the long-term, AI will potentially expand Google's total addressable market and allow them to win new customers. Alphabet Inc. (NASDAQ:GOOG) has some big tech competitors in AI including Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), and Amazon.com, Inc. (NASDAQ:AMZN).
On July 28, Alphabet Inc. (NASDAQ:GOOGL) released its earnings for the second quarter of 2023. The company posted earnings per share of $1.44, beating the expectations of $0.10. The company posted revenue of $74.60 billion and surpassed the consensus by $1.85 billion. Google continues to progress with its cloud business and advance in AI. With so much hope around Google's AI technology and future AI plans, Alphabet Inc. (NASDAQ:GOOGL) has soared 10% this week. During the Q2 2023 earnings call, the company made the following comments:
"The momentum across the Company drove our results this quarter. We delivered solid performance in Search and YouTube and ongoing strong growth in Cloud, where we remain focused on long-term value creation. And we continue our important work to operate more efficiently, creating durable savings to fund investments in our biggest priorities.
Some of the best tech stocks to buy according to hedge funds include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOGL).
20 Worst Performing Economies in 2023
20 Worst Performing Economies in 2023
Our Methodology:
To find data for the 20 worst performing economies in 2023, our focus was on the economies with the lowest real GDP growth rate with annual percentage change. The real GDP growth rate reflects the economic growth of an economy expressing its GDP from one period to the next. We ranked the list from the IMF's database which tracks the real GDP growth rate. The economies with the same real GDP growth rate are differentiated based on their GDP at current prices, which was taken from the IMF's database of GDP at current prices. The country with lower GDP at current prices is ranked higher and so on. The list may not include countries such as Western Sahara, Syria, and Lebanon as their data is not available. The lists are then ranked in descending order of the aforementioned metric. Here are the 20 worst performing economies in 2023.
20 Worst Performing Economies in the World
20. Austria
Real GDP Growth Rate of the Country (2023): 0.4%
Following a strong rebound of the economy in 2022, Austria’s GDP is expected to have plunged by -0.3% in Q1 2023. The significant decrease in goods exports and rise in energy prices has negatively affected the economy. Austria has a GDP of $515.2 billion and is ranked 20th on our list of worst performing economies in 2023.
Top technology companies with a stellar performance in 2023 so far include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG).
19. Puerto Rico
Real GDP Growth Rate of the Country (2023): 0.4%
Puerto Rico is a U.S. territory and its economy is hammered due to the loss of federal tax provisions and massive debts. In addition, the country’s economy has suffered heavily from natural disasters, on top of the government’s mismanagement. Puerto Rico has a GDP of $120.84 billion and ranks among the worst performing economies in 2023.
18. Latvia
Real GDP Growth Rate of the Country (2023): 0.4%
Latvia’s economy is suffering due to high inflation and delays in public investment programmes. The country has a GDP of $47.4 billion and ranks 18th on our list of the worst performing economies in 2023.
17. Poland
Real GDP Growth Rate of the Country (2023): 0.3%
Poland is facing severe consequences of the Russia-Ukraine war. The high inflation has negatively affected the real income of individuals and the country’s private consumption is expected to decline in 2023. Poland has a GDP of $748.89 billion and is ranked 16th among the worst performing economies in 2023.
16. Haiti
Real GDP Growth Rate of the Country (2023): 0.3%
Haiti faces serious threats from political instability and increasing violence. The country’s economic and social development continues to suffer from increasing social insecurity and vulnerability to natural hazards. Haiti has a GDP of $26.58 billion and makes it to the list of worst performing economies in 2023.
15. Argentina
Real GDP Growth Rate of the Country (2023): 0.2%
Argentina is going through one of the worst economic crises. The country’s economy is affected by strict import controls. While the inflation rate is unprecedented considering the vulnerability of the economy. Argentina is one of the biggest Latin American economies with a GDP of $641.1 billion and ranks among the worst performing economies in 2023.
14. South Africa
Real GDP Growth Rate of the Country (2023): 0.1%
South Africa’s high public debt level restricts the government’s potential to retaliate against economic shocks and fulfill social and development needs. The COVID-19 pandemic has created daunting socio-economic challenges for the country. South Africa has a GDP of $399.02 billion and ranks 14th on our list of the worst economies in 2023.
13. Denmark
Real GDP Growth Rate of the Country (2023): 0%
Denmark’s economy is recovering gradually post-pandemic. The country’s private consumption is expected to recover as consumer confidence improves. Denmark has a GDP of $405.63 billion and is ranked one of the worst performing economies in 2023.
12. Finland
Real GDP Growth Rate of the Country (2023): 0%
The economic growth in Finland continues to experience weak business and consumer confidence. In 2023, high inflation and strict financing conditions will have a massive impact on consumption in Finland. The country has a GDP of $301.67 billion and is ranked 12th on our list of the worst performing economies in 2023.
11. Germany
Real GDP Growth Rate of the Country (2023): -0.1%
One of the biggest European economies is stagnating as Germany technically enters a recession phase. As of July, KPMG shared Germany’s economic forecasts for 2023 ranging from -0.5% to +0.4%. With the country’s GDP of $4.31 trillion, Germany remains one of the worst performing economies in 2023.
10. United Kingdom
Real GDP Growth Rate of the Country (2023): -0.3%
One of the biggest powers in the world, the United Kingdom is coming across paramount economic hindrances. Exposed to high gas prices, increasing interest rates and static trade activities are causing the economy to fall. The United Kingdom has a GDP of $3.16 trillion and ranks among the worst economies in 2023.
9. Lithuania
Real GDP Growth Rate of the Country (2023): -0.3%
Just like most of the other European economies, Lithuania has faced the consequences of Russia’s invasion of Ukraine. The economic activity is hammered by a contraction in private consumption. The supply chain disruptions have forced input prices to hike. Lithuania has a GDP of $78.35 billion and ranks ninth on our list of the worst performing economies in 2023.
8.Sweden
Real GDP Growth Rate of the Country (2023): -0.5%
The rise in energy prices and interest rates affecting domestic demand is expected to slow down the economic growth of Sweden. The country has a GDP of $599.05 billion and ranks among the worst performing economies in 2023.
7. Czech Republic
Real GDP Growth Rate of the Country (2023): -0.5%
The Czech Republic after a modest economic performance in 2022 is following a downward trajectory. The contraction in the economy is driven by increased price pressure amidst compact domestic financial conditions. The Czech Republic has a GDP of $330.48 billion and is ranked seventh on our list of the worst performing economies in 2023.
6. Yemen
Real GDP Growth Rate of the Country (2023): -0.5%
One of the struggling economies in the Middle East, Yemen faces long-term economic challenges. The country has major infrastructural damages caused by war over the past decade. Yemen has a GDP of $19.53 billion and ranks sixth on our list of the worst performing economies in 2023.
Some of the biggest tech companies in the world include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG).
