Taking the temperature of the economy two years into the pandemic [4]: Which countries’ economies have recovered the most?

Prior to the COVID-19 pandemic, one of the global megatrends that was clearly visible was the shifting of the world’s economic centre of gravity towards Asia. On balance, there was also some global convergence in GDP and GDP per capita levels. How has the pandemic changed these trends?

In the data visualisation above, I’ve looked at how post-pandemic recovery (Y-axis) compares to pre-pandemic income levels (X-axis in left-hand panel) and GDP growth rates (X-axis in right-hand panel). The bubble size indicates each country’s total GDP in 2020 at market exchange rates.

The left-hand panel doesn’t provide a particularly strong pattern either way. There are some lower- and middle-income countries (towards the top left corner of the chart) such as Turkey, China, Colombia, India, and Poland that have exhibited relatively strong growth since the fourth quarter of 2019. They posted real GDP levels in Q4 2021 substantially above pre-pandemic levels.

On the other hand, there are also several lower- and middle-income countries that didn’t fare so well (bottom left corner), including Thailand, Mexico and South Africa. And, some fairly prosperous countries — such as the US and Norway — also showed decent growth relative to pre-pandemic times. [Note: Ireland’s GDP growth is not comparable to other countries because many multinational corporations “book” their profits in Ireland, including for some activity outside Ireland.]

The right-hand panel does have a clear pattern. Those countries that were already on a strong growth trajectory ahead of the pandemic have also tended to have bounced back the fastest. Several European countries and Japan, with relatively high income levels but sluggish growth since 2000, had only just recovered to pre-pandemic GDP levels by end of 2021 (bottom left corner of right hand panel). These countries included, among others, Austria, Belgium, France, Germany, Portugal and the United Kingdom.

It does also seem that, based on these figures, the trend of a shifting economic weight towards Asia has continued despite the pandemic. Several of the larger and faster-growing Asian countries — including China, India, Indonesia and South Korea — have been able to grow relatively faster since 2019 compared to other nations. However, this picture is by no means either universal or “final”. As always with these blogs, the data simply shows a snapshot in time.