In this week’s EconMinute, we’re talking about per capita economic growth outlooks.
Recently, the International Monetary Fund (IMF) released its October World Economic Outlook. Within the report, the IMF published the latest economic growth projections, as measured by Gross Domestic Product (GDP), for various countries for 2023 and 2024.
These projections provide insight into the health of a given economy and the relative strength—or weakness—across countries and over time.
Generally, individual countries are expected to see positive, albeit modest, growth through 2024 as the global economy slows. However, these projections also reflect the impact of population growth. As the population of a country increases, so too does its economic “pie”.
What we were curious to see is if growth will be high enough that everyone gets a bigger slice. To answer this question, we use available population projections to determine whether GDP per person was expected to rise, i.e., can the average individual expect to see their living standards improve?
Looking across the G7 countries, here’s what we found:
- Through 2024, most countries within the G7 will see modest improvements in living standards.
- However, they will see only a fraction of the growth that they experienced historically.
- Japan, meanwhile, is an outlier. It is expected to see higher per capita growth than its historical average and a rate of growth more than double that of other countries—as its economy grows in value, while its population shrinks.
- On the lower end, Canada and the UK—who are set to tie for the lowest per capita growth in 2024—will see almost no improvement in living standards.
A challenge with Canada is that this relatively poor performance represents a continuation of its weak historical trend. Canada’s per capita growth has been minimal and lagging behind other countries for many years. Based on these projections, nothing is expected to change in the next year or two; Canada’s economy is still struggling to grow faster than its population and to remain competitive with comparable countries—a major concern for long-term national prosperity.
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