Best countries in 2022: where were the highest performing economies?

best countries in 2022

11th January 2023

As the New Year begins, we thought we’d take a look at the countries that achieved the highest scores in the economic performance rankings last year and the ones that have struggled for points. Economic headwinds and a catalogue of unprecedented events have made conditions extremely tough for contractors. Before delving into the detail, a quick reminder for all contractors to remain compliant as tax deadlines loom in the New Year.

Top performing countries of 2022

The findings as revealed in The Economist (based on different sources such as the ONS, Fitch, the OECD and from its own research) revealed some interesting surprises. Here we round up some of the key results based on the major economic indicators, as we discover the 2022 winners …

Only in recent times at the centre of one of the worst economic crises in history, which plunged the EU into chaos, Greece has bounced back, topping the charts and recording the biggest rate of GDP growth (2.2%) from Q4 in 2021 to Q3 in 2022. Consumer prices in Greece rose by 7.8%, compared to the 6.9% and 8.4% registered in the US and Britain respectively. Something must be in the warm Mediterranean air as Spain and Italy also made it into the top 10. The reopening of borders, the return of tourists and increased bookings have clearly provided these economies with a timely economic stimulus.

Britain hasn’t fared too badly either, its 1.7% increase a significant improvement on its struggling neighbours from across ‘La Manche’ who could only manage 0.5%. The US could only register a lowly 0.2% gain over the same period in part due to the Fed’s ongoing tough stance on interest rates. Japan could only muster 0.4%. But the most notable result for the wrong reasons has to be Estonia, which finished bottom of the 34-country list with negative GDP growth of -3.4%. High inflation – consumer prices in the period rose by 16.7% – has been a major factor not to mention the Ukraine conflict.

Reliance on Russia

What else did the statistics reveal? Other countries that have done relatively well GDP wise include Norway, which has been helped by high oil prices and Turkey, which has maintained close trade links with Russia despite the sanctions imposed by most of the world’s leading economies. Interestingly, GDP in Germany only grew by 1.3%, an indicator that the EU’s strongest economy has underperformed in 2022 despite the political stability in the country. The Israeli economy also recorded strong growth figures although forecasts would point to a slowing down in 2023.

The change in consumer prices during the period December 2021 – October 2022 presents a mixed picture. On the one hand, there are those economies that have suffered from rising energy prices and resulting inflation, which tend to be those that are more reliant on Russia for their energy. Spain is an outlier, managing to contain its inflation at a below average global rate (5.4%) as it gets much of its natural gas from Algeria. Switzerland’s strong currency and the rapid monetary policy response of its central bank early in the year did much to stem the tide, resulting in consumer prices rising by just 3%.

The inflation breadth indicator in The Economist’s country rankings looks at the proportion of the items in inflation baskets that have risen by more than 2%. It sheds more light on how systemic inflation actually is and the likelihood with which it is likely to fall in 2023. So although, for example, Italy’s headline inflation rate is higher than Britain’s, its inflation breadth is only 64.7% compared to the 100% here, which tells you that prices are rising fast across the board at home. Japan has the lowest score of 55.6% with Spain the next best on 58.8%, which bodes well for both countries.

The movement in share prices is also key given the impact on workers’ pension pots and stock portfolios, so is an indicator that deserves attention. In this regard, Norway has again done well with Britain also in positive territory (1.1%) thanks to a fall in the pound which has helped foreign sales. Other countries, however, have posted negative percentage changes, most notably the US which has seen share prices fall by almost double digits (9.7%). But even the world’s second largest economy is eclipsed by Germany’s worrying 17.8% fall, indicative of the decline of its corporates.

Some very insightful end of year country highlights we’re sure you’ll agree. While no one can predict with any certainty what will happen in 2023, there will be plenty of opportunities for skilled contractors around the world as economic and inflationary pressures (we hope) begin to ease. If you have any questions regarding tax compliance in any of the countries mentioned or other global territories, never hesitate to get in touch with our 6CATS International specialists.

6CATS International is part of WorkwellTM Group

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