What Makes An Economy ‘Stable?’

There are a number of different factors that affect the economic stability of a country, such as the development of technology, human capital, levels of infrastructure, geographical location, weather, political instability and commodity prices.

What’s important to note when assessing any individual economy is that all markets are interrelated in some way given the extent of globalization in the 21st century. That is when large economies go through periods where they aren’t very stable (we call this a recession) other economies around the world are impacted. We saw this in 2009 when the global economy went into recession after the US housing bubble burst. Read more about this here.

Basically, the economic growth of any country defines the annual percentage increase in the gross domestic product. Now, the countries that are poised to experience the most economic growth in the near future aren’t necessarily the most stable, but they do pose the greatest hope for future economic stability compared to countries that are not growing by as much.

Take this chart for example. If you’re interested in which countries will have the most stable economies in the next decade or so, look to South-East Asia. A trade deal was signed between Brazil, Russia, India, China, and South Africa (BRICS) in an attempt to decrease reliance on US manufacturing and inspire growth in their own regions. This is why India and China lead the list for 2017 global growth forecast.

When looking at this graph, note that a trade agreement does not guarantee economic stability. India, China, and Indonesia are experiencing high economic growth because they have capitalized on new technology, invested in infrastructure, secured a reliable political and educational foundation, as well as paved the way for transportation routes that will span Asia, making exports to Europe more efficient.

We can expect to see growth continue in these regions and furthermore, a period of South-Eastern Economic stability.

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David McDonald

Founder at The Global Millennial

David is a 19-year-old Canadian student currently attending the University of Guelph. He currently studies Public Management and economics with hopes of one day becoming an accomplished journalist. David enjoys reporting on global events and actively try to make a difference in the world.

Latest posts by David McDonald (see all)

• The Truth Behind Japan’s Negative Growth Rate – June 3, 2017
• Economic Analysis: Italy’s Economy Faces An Uncertain Future – June 1, 2017
• Velocity Of Money – Will Paper Currency Soon Become Outdated? – May 30, 2017