Tuesday, May 1, 2012

Trends among OECD countries: debt, deficit, growth, manufacturing

When talking about macroeconomics variables, we often miss a sense of the overall trends that may help to put data in perspective. In this post we make an exercise with basic OECD data for debt, deficit, growth and manufacturing. We collected data from OECD tables, in the period from 1995 to 2011, for 34 countries, and we offer some comments based on a intuitive and qualitative evaluation of the figures.

(1) Debt (as % GDP)
- Debt higher than 80% is less frequent;
- often between 20% and 60%,
- but inter countries variance was smaller between 2000 and 2007
- variance is now higher, after 2007
- but not very different from 1995 (especially if top 2 or 3 largets debtors are ignored)
- top debtor: Japan. Stock of debt has grown 3 times (as % GDP) from 1995 to 2009.
- top 5 debtors: Japan, Greece, Italy, Belgium and Israel. Belgium is not so far from Italy. Only Israel shows a decrease in debt level after 2008. All the others have increased their debt.
- top 4 less leveraged: Estonia and Luxemburg, Australia and Chile. But Luxemburg went from 1 to 2% to 13% after the 2008 crisis.

(2) Deficit (annual, as % GDP)
- Most of times, the range is from -8% (deficit) to +8% (surplus).
- Only one serious outlier: Norway, with surplus higher than 10% from 2003, and maintaining the level higher than 10% after 2008.
- Chile is the candidate for the second largest surplus
- Ireland is the new outlier, deficit side (but it used to be in the surplus side for most of the last decade).
- Greece is the more consistent lower end boundary (deficit side). Hungary is a second candidate.

(3) Growth (annual, % GDP)
- Negative growth has not been so frequent during this period (1995 to 2011)
- Years with more than 10% growth also have not been frequent among OECD countries
- 2008 crisis effect in growth has affected 2009 growth in almost all countries, and it is the most visible change in data, but post 2009 recovery is also visible for most of the countries
- Estonia had a the top performance before 2008, but also the worst recession during 2009. But also a fast recovery.

(4) Manufacturing (as % GDP)
- The overall trend is that manufacturing share of the economy has been decreasing during last 15 years
- the importance of manufacturing is now from 10 to 20% GDP in most OECD countries
- Ireland used to have the largest share of manufacturing (25 to 30%) until 2002, but decreased very fast after 2002
- Korea seems to be now the top outlier, with 25% GDP and increasing. The increasing trend during the period seems to be unique among ORCD countries. Korea is now the OECD country with the largest manufacturing share in GDP (more than 25%)
- Czech Republic is the second top outlier, and it does not show a clear declining trend
- Luxemburg, Norway and Australia are the three bottom outliers. Iceland used to be, but the importance of manufacturing has increased substantially after 2007 (consequence of busting of financial services, more than an increase in the level of manufacturing activities).

(Source of data: OECD StatExtracts)

Update, 30 May: Unemployment rate, 1991 to 2011

- Spain is one of top lines: it is the blue line, visible until 2000, then disappearing and back after 2008
- meanwhile Poland and Slovak Republic are two top lines in contra cycle to Spain 
- Finland and Ireland are the green lines with high unemployment during the 90's
- After 2008 crisis, top curves below Spain are Estonia, Greece, Slovak Republic and Ireland. 
- Bottom lines are from Korea, Mexico. Switzerland, Iceland and Norway, in different periods of time
- Luxembourg is a regular one in the bottom.

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