Top 10 economic news of 2021

This column is a list of signiFsignificant economic events of the past year.

1. Among the 50 largest economies in the world by GDP size, the five worst performing and deepest GDP contractions in 2020 were: Spain with -10.8%, followed by Argentina -9 .9%, UK -9.8%, Philippines -9.6% and Italy -8.9%. Final 2020 data with projections for 2021-2025 were released by the IMF’s World Economic Outlook (WEO) in October 2021.

2. Among the top 50, only seven countries managed to grow and escape contraction in 2020, four of them in South and East Asia: Bangladesh with 3.5%, Taiwan 3.1%, Vietnam 2.9% and China 2.3%. The Philippines was the 34and largest economy in the world in 2020, but possibly the 32n/a if it only decreased by around -8% or less and not -9.6%.

3. There has been GDP growth Iffrom the first to the third quarter of 2021. Almost all countries managed to grow, but largely due to the “base effect” – their GDP levels in 2020 were low, so any marginal increase above this weak base would translate into growth. The Philippines grew by 5.1% in Iffirst three quarters of 2021, but that would only equate to the 2018 level of GDP. It would reach the 2019 level around the second or third quarter of 2022.

4. Inflation in 2020. Most countries saw a decline in consumer prices compared to 2019. The Philippines and Vietnam, however, saw a slight increase in inflation. Strict lockdowns in the Philippines have led to interruptions and delays in supplies (goods, repairs and spare parts for tractors, trucks, boats, etc.) due to numerous checkpoints and barriers between provinces – even between cities in same province – which contributed to higher inflation.

5. Inflation in 2021 was double or triple 2020 levels for many countries – the US, UK, Germany, France, Italy, etc. The free money from governments handed out to people who spent it even though they didn’t contribute to the production of goods and services, the logistical delays at major seaports, and then the spikes in energy prices, have contributed to it. In East Asia, the Philippines has the highest inflation rate — it’s not good.

6. Merchandise exports in 2020 declined in many countries except China, Taiwan and Vietnam. These three Asians also escaped GDP contractions that year. All G7 member countries have experienced signiIfcannot lower exports. The closure of many manufacturing plants for several weeks and strict and slow inspections at ports contributed to this. Global export data was released by the World Trade Organization (WTO) World Trade Statistical Review (WTSR) 2021 on July 30.

7. The Philippines’ exports remain the smallest among emerging and developed countries in East Asia, at just $64 billion in 2020. Our neighbors – Malaysia, Thailand and Vietnam – have around four times that level while Singapore has nearly six times that level (see table 1).

8. Vaccine discrimination or mandatory vaccination implicit as trade and economic policy by many governments in wealthy countries has gone wild. By the end of the third quarter of 2021, many of them already have vaccination rates of 65-86% of their total population. By the end of 2021, this has increased to 73-88% of their populations. The Philippines had a slow start but surged to 51% by the end of 2021.

9. Infections with the COVID-19 Omicron variant appeared to be higher in wealthy countries with high vaccination rates, their seven-day average cases per million population last week ranged from 2,300+ (Germany) to 16 800+ (France) but deaths from Omicron appear low, and appear even lower in countries with lower vaccination rates such as the Philippines, Indonesia and India.

10. Lockdowns and restrictions on people’s mobility continued through the end of 2021. Weekly Google Community Mobility Reports (GCMR) shows how visitors to (or time spent in) classified places are changing (by percentage) compared to the reference days, using the median value of the Iffive-week period between January 3 and February 6, 2020. As of December 30, 2021, mobility at public transport stations (TS) and workplaces (WP) remained high. The Philippines, for example, has -48% in WP (see table 2).

Anemic GDP growth and high inflation in 2021, along with high public debt, continued mobility restrictions and lockdowns, vaccine discrimination, all point to a lackluster start to 2022. We hope that governments, multilaterals, most NGOs and the media, the pharmaceutical industry, etc. will temper fear and hysteria. Viruses will continue to mutate and evolve 100%, and humans and other living creatures will also continue to evolve 100% naturally. The sooner we realize that we have to live with evolving viruses, the better.

This is the sixth in the annual series of this “Top 10 news of the year” column, the others being:

1. “Top 10 news of 2016,”

2. Global and Domestic Trade Trends (2017),

3. Top 10 economic news of 2018,

4. Top 10 economic news of 2019,

5. Top 10 economic news of 2020,

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.


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