CARACAS — Venezuela has deemed the worlds worst economy through a number of indicators. The Misery Index along with estimated economic growth, clearly show that Venezuela will once again run away with the title of worst economy.
The Misery Index is comprised of two parts; inflation and unemployment. Venezuela at rank one in 2015, has a predicted score of 159.7 for 2016. This is made up of 152% inflation plus 7.7% unemployment. This number is best understood when compared to the second worst country, Argentina, which has a score of just about 40.
A large part of Venezuela’s downfall can be traced to oil prices. Oil makes up 95% of the country’s exports, and with the recent drops in world oil prices, Venezuela’s economy has suffered in turn. Recently the government had to raise the gas prices, something they hadn’t done in nearly two decades. Even with the over 6000% price increase, Venezuela continues to have the world lowest gas prices.
Besides a year of suspected high unemployment and the world’s highest inflation, Venezuela has also ranked last on the list for 2016 predicted economic growth. Of the 93 countries included Bloomberg’s study, Venezuela had a bleaker future than neighbour Brazil and even debt-laden Greece, which took second and third to last place respectively.
Venezuela is predicted to contract 3.3% in 2016. Brazil is predicted to have -2.5% growth, while Greece will contract 1.8%. Ecuador and Russia respectively take 4th and 5th place of the predicted worst growths for 2016, both with predicted -0.5% growth. These bottom 5 countries are the only ones predicted to have a contracting economy for 2016.
Argentina, which has the 6th worst predicted economy is set to have 0% growth, but according to the study it also has a 60% probability of recession. This places it in a select group of 5 countries that had a over 50% chance of falling into a recession in 2016. The other 4 countries are, Taiwan with a 55% risk factor, Ukraine also with a 60% chance, Russia with 65%, and the previously mentioned shrinking economy of Brazil which has a 75% chance of falling in recession this year.
On the flip side of these rankings, India, Vietnam, Bangladesh, China, and Sri Lanka constitute the top five countries with the highest predicted economic growth for 2016. These boast predictions of 7.4%, 6.6%, 6.6%, 6.5%, and 6.4% respectively. India has a 0% chance of recession while China has a predicted 12%.
Thailand, Singapore, Switzerland, Japan, and Taiwan rank as the happiest five countries according to the Misery Index. Thailand tops the chart partly due to a unique structural issue that allows the government to count more people as employed. However these are only the happiest countries according to the Misery Index, which only takes inflation and unemployment into account.
– Paul Carlsen, Correspondent (South America)