Global Insights

Global economy can be defined as the sum of activities that take place both within a country and between different countries. Each country is a separate unit, with its own industrial production, labor market, financial market, resources and environment. The globalization enabled and enhanced the development of international trade, finance or migration of labor force, which are the examplary areas, where countries need to find common solutions and cooperate with one another. One of the effects of the globalization is that drastic changes in one country influence other countries. Brexit has not only changed the situation in Great Britain, but in the whole European Union as well.

Since 2020, the world has seen two crises that have had a massive impact on the global economy. First, as the coronavirus (COVID-19) started spreading that year, companies and stores around the world were forced to shut down, resulting in a global economic downturn. Then, as the economy was slowly starting to recover from the effects of COVID-19, Russia’s president Vladimir Putin decided to invade Ukraine in February 2022, which resulted in rising inflation.

Global GDP stands at USD 96.3 trillion. There are numerous indicators which allow to measure and analyze the economic activity – they are called economic indicators. One of the most important economic measures is gross domestic product (GDP), which is the total value of all goods and services manufactured within one year. Despite a downturn in 2020 following the COVID-19 pandemic, global GDP increased over the past decades, and is expected to continue to increase over the coming years. The United States was the country with the largest gross domestic product in 2021, followed by China, Japan, and Germany. These economies are expected to remain the dominant ones over the next years, but some of the highest growth rates are found in countries in the Global South.

Looking at the GDP per capita, countries such as Luxembourg, Singapore, and Qatar emerge as world leaders. On the other hand, Burundi, South Sudan, and Somalia had the lowest GDP per capita in 2021. In 2020, global GDP per capita amounted to 10.92 thousand U.S. dollars.

Global inflation rate forecasted for 2022 is 7.4%. In 2021, about 214 million people were unemployed worldwide, which was less than in 2020. The world region with the highest unemployment rate in 2020 was the Arab World.

As a result of the Russian invasion of Ukraine, prices of goods and services increased rapidly through the first months of 2022. The global inflation rate was expected to reach over seven percent in 2022. In 2021, the price levels increased most significantly in Venezuela and Sudan, while the lowest inflation rates were reported in Samoa and Chad.

Looking at trade, China has become the largest export country through the last decades, with exports worth about 3,4 trillion U.S. dollars in 2021, nearly twice as much as the United States. Meanwhile, USA was the leading import country, followed by China and Germany.