The global economy is threatened more by rising prices this year than by joblessness, in accordance with the Misery Index from Bloomberg, which tallies unemployment and inflation outlooks of 66 economies throughout the world.
As it turns out, Venezuela and South Africa have the world’s unhappiest economies.
And Thailand, Singapore continues to have the ‘least miserable’ economies.
Venezuela is now marking its fourth straight year as the most miserable economy on the planet, having a score that has more than tripled since 2017. Thailand has again received the “least miserable” status, although its wacky way of measuring unemployment makes Singapore a very strong second place. And other notables include Mexico, who is looking to gain some ground this year as their inflation has become much more manageable, yet Romania gets a lot more misery for the exact opposite reason.
The Bloomberg Misery Index depends on the old theory that low unemployment and low inflation typically reflect the happiness people are about their economy. However, there are cases when a low number is indicative of something negative going on in a county. For instance, constant low prices could be attributed to poor demand, and low joblessness could hamper workers who are looking to find a better job.
These results indicate that they global outlook on the economy remains upbeat. Experts and economists are projecting a 3.7% world growth for 2018, which would match the pace of last year which was the best growth since 2011, according to Bloomberg surveys.
Not everyone was fortunate enough to enjoy this growth. Take Venezuela, their hyperinflation is making economists shake their head in disgust. Currency rates from the black market provide angles on the numbers, and alternative measures have created daily cost swings. Recent government cutting of grocery prices provided a very brief cease in the inflation, but the surveyed economists are expecting it to rise 1,864% this year.
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On the opposite end of the spectrum, Mexico made the best progress of anyone this year, as they moved 16 notches toward being the “least miserable”. This is because economists continue to be optimistic that its central bank will curb its high inflation from 2017, which will bring it to 4.1% this year after 6% percent in 2017. And its unemployment will remain around 3.4%.
But there are two caveats with Mexico. Their jobless numbers do not consider the 60% of workers that are in their informal economy. And in spite of the improvements from last year, consumer confidence is still in a funk and negotiations pertaining to Nafta may have a negative effect.
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Malaysia made a big move down this misery scale, going from No. 52 to No. 43 because of its easing inflation. The slow price growth is permitting the Bank Negara Malaysia to remain patient with the hiking of interest-rates, even while they were the very first in its region to tighten this year.
The United States should see an improvement to 6.2 this year from the score of 6.5 in 2017 even as inflation will rises after years of low price gains, and while the labor market tightens.
China, who owns the second biggest economy in the world, experienced rise on the misery scale with this year’s score of 6.3 from 5.5 in 2017. It is estimated that their consumer prices will rise 2.3% this year, compared with the 1.6% number from 2017.