Under the influence of the Federal Reserve's interest rate hike , most currencies around the world cannot escape the fate of depreciation, while USD index is growing. In order to curb its own high inflation, the Fed's interest rate hike is far from stopping. Every round of US dollar interest rate hike is a "harvest" of wealth for most economies. The global economy gradually declines due to US dollar interest rate hikes, and the risk of economic recession gradually increases.
On the other hand, under the impact of the global epidemic in recent years, the development of many industries is very difficult, and the global industrial chain has been affected; coupled with changes in the regional situation, the global commodity price has risen sharply, which has contributed to the global inflation level. Therefore, the growth momentum of global GDP will slow down in 2022. Let’s take a look at the economic growth forecast data of various countries this year.
India has developed faster
India has achieved a rise in its ranking in the first half of this year, rising from sixth to fifth in the world, successfully surpassing the UK. As an emerging economy, India's GDP growth rate in the past few years has been remarkable. In the first half of this year, India's GDP grew by 8.4%, leading most economies and accelerating the pace of recovery.
In the first half of the year, India's total GDP reached 1.7 trillion US dollars, not far from Germany's GDP. The gap is generally narrowing. Therefore, according to data, India's GDP this year will reach 3.5 trillion US dollars, still the fifth in the world. India's goal is to become the world's third largest economy by 2030, ranking behind China and the United States, but this goal has also been questioned a lot.
Japan's position is difficult to maintain
Japan's situation is completely opposite. India's total economic output is generally rising, while Japan continues to decline. Japan's GDP in 2021 was US$4.9 trillion, which is not as good as its GDP in 2008. The economic downturn has been through Japan's development process for more than 30 years. Due to the strong strength of traditional manufacturing, Japan's strength has not declined significantly.
However, the Japanese yen exchange rate has continued to depreciate this year, and has fallen to the 150 mark in recent times, setting a new low since the 1990s. The sharp drop in exchange rate may directly lead to the regression of Japan's GDP back 30 years ago.
According to the forecast of OECD (OECD ), Japan's GDP will fall below US$4 trillion after being converted into US dollars this year, which is expected to be around US$3.9 trillion. At that time, Japan's third position will be difficult to protect.
According to this calculation, Japan will directly lose trillions of GDP compared to last year, which is the most intuitive change brought about by currency depreciation. The sharp depreciation of the currency will also lead to the emergence of unfavorable factors such as the outflow of Japanese household capital.
The GDP gap between China and the United States widens
The United States is still leading in GDP, with the U.S. GDP reaching 12.26 trillion US dollars in the first half of this year. Although the year-on-year economic growth rate was 3.2%, the nominal growth rate was very high, among which inflation had a great impact. In the first half of the year, the US inflation remained above 8%, which invisibly drove the growth of GDP growth. However, this impact is harmful to economic growth in the long run.
In the second half of the year, Federal will continue to raise interest rates. Curbing inflation is the most urgent thing for the United States at the moment, but the inflation in the United States is not "happy" and still maintains high growth. The US CPI grew by 8.2% in September. It seems that blindly raising interest rates is not a good medicine to curb inflation.
Based on the economic growth rate in the first half of the year, the US GDP is expected to reach between US$24-25 trillion in 2022, and it is still the largest economy. my country's GDP exceeded US$8.6 trillion in the first half of the year. According to the economic growth rate and changes in the exchange rate in the second half of the year, my country's GDP is expected to be around US$19 trillion this year, with a difference of US$5-6 trillion, and the gap slightly widened.
Overall, it is difficult to guarantee the third place in Japan in the world this year. In the long run, Japan's GDP ranking decline is destined. This year, it depends on Germany's performance. Germany has great hope to surpass Japan. The US dollar will strengthen in the short term, but in the long run, the expectations of RMB appreciation will not change. It is expected that my country's GDP will surpass the United States before 2030, and India is expected to rank third in the world. However, it is still controversial whether India can maintain sustained high growth.
