Which will be the most miserable economies in 2019?
As Steve Hanke put it, the human condition inhabits a vast continuum between “happy” and “miserable.” When it comes to economics, misery tends to stem from high inflation and high unemployment. The best way to ensure happiness is to grow economically, but that is not easy with high inflation and unemployment.
The vast majority of countries report on economic indicators on a regular basis. Therefore, we can compare each nation to get an idea of how happy or miserable the people are in each of the nations.
Are you curious how happy or miserable your country is? In this post we attempt to give you an idea of which countries will be the most miserable (or happy) this year by using our projections for inflation and unemployment in 2019 for 130 countries to calculate their misery index score.
Click on the image to view a larger version
What is the misery index?
The misery index is an economic indicator calculated by simply adding the unemployment rate to the inflation rate. Despite its rather simple calculation, it is useful in determining how the average citizen in a given country is doing, as higher rates of unemployment and inflation are associated with increased socioeconomic issues for a country.
The misery index, originally created by Arthur Okun, a member of the Council of Economic Advisers to U.S. President Lyndon B. Johnson, was invented in the 1970s while he worked at the Brookings Institution. The misery index is often trotted out during times of economic turmoil and Okun’s invention was certainly timed to perfection in that regard. During the 1970s, the U.S. as well as much of the rest of the world was suffering from both high inflation and high unemployment, which came to be called “stag-flation”. This was largely caused by OPEC’s rise to power and subsequent oil shipment boycott to the U.S. and other western nations in retaliation for their assistance to Israel during the Yom Kippur War. This situation caused oil prices to skyrocket and economic growth to slow while the stock market crashed.
Although the misery index usually appears in times of economic turmoil, the global economy is doing pretty well at the moment. We forecast global growth at 2.9% in 2019. However, we’ve brought out the misery index anyway to see which economies will be moving toward misery and happiness in 2019.
2019 Misery Index
Contrary to most lists, the misery index is a list where economies want to be as far from the top as possible. And speaking of the top, any way you slice it, Venezuela is going to be the most miserable economy in 2019. With inflation projected to come in at over 6,000,000% in 2019, their unemployment level is largely irrelevant for our calculations of their misery. Venezuela’s economic woes have plagued them for years now with sluggish oil prices having played a large part in the country’s demise, as crude oil is the country’s only significant export. Venezuela’s situation doesn’t look like it will be changing any time soon, as macroeconomic imbalances, unorthodox policies, surging inflation and a lack of investment are expected to keep Venezuela in a severe economic crisis for the foreseeable future.
Although no country comes anywhere near Venezuela’s score on the misery index scale, Zimbabwe and Argentina come in as the second and third most miserable countries in 2019.
In Zimbabwe, unemployment is the main concern with a projected rate of close to 80% for 2019. This number may be skewed depending on how unemployment is counted. Thailand is often near the very bottom of the list due in large part to their rather unorthodox way of counting employment as well as their low fertility rate and aging population. Much of Zimbabwe's population works in the "informal economy" which includes people working unpaid for a family business or paid emplpyees who are not entitled to sick leave or paid holidays. These people are not counted as employed.
In Argentina monetary authorities continue to attempt to curtail the stubbornly high inflation rate, although with little success. In Iran, economic sanctions from the U.S. continue to fuel inflation.
In Bosnia and Herzegovina, the main culprit is unemployment; however, the number of unemployed fell throughout Q4 2018, pointing to a strengthening labor market in 2019.
In the two African giants, Nigeria and South Africa, the unemployment rate contributes most to their Misery Index score. In Nigeria, unemployment has surged to 23.1% in Q3 2018 from 9.0% since 2015. Although inflation has been trending downwards since early 2016, it has remained persistently above the Central Bank’s target range of 6.0%–9.0%. In South Africa, while unemployment is projected to stay near 27% for the next five years, inflation touched a 10-month low in January on slowing fuel costs. FocusEconomics analysts project that inflation will remain within the SARB’s target range over the forecast horizon. Moreover, they see inflation averaging 5.0% in 2019 and 5.2% in 2020.
In war torn Yemen, the situation continues to spiral out of control. The economy has been torn to shreds by the civil war, which has caused agricultural and hydrocarbon production to screech to a halt and fiscal revenues to plummet, while a cholera epidemic has spread rapidly.
In Kosovo, high unemployment plagues the country with large numbers of young people leaving in search of a better life in EU member countries. Some have pinned the high unemploment rate on nepotism, crime, corruption, which has led to decreased foreign investment and many young people to move abroad.
In Turkey, the economic crisis has seen higher levels of both inflation and unemployment. The economy seems set to remain fragile this year as restrictive financial conditions dent domestic demand. Nevertheless, a recovery in H2 is likely according to FocusEconomics analysts.
If you'd like more forecasts and analysis of over 130 countries and 30 commodities, download a sample report by clicking on the button below.
5-year economic forecasts on 30+ economic indicators for over 130 countries & 30 commodities.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.
Author: Brian Dowd, Marketing Coordinator
Date: March 29, 2019
TagsUSACompany NewsMENARussiaJapanEastern EuropeItalyForexGreeceoil pricesBanking SectorSouth AfricaUnemployment rateChinaExchange RateOilOPECEuropean UnionUnited KingdomUKConsensus ForecastPrecious Metals CommoditiesHealthcareEnergy CommoditiesG7BitcoinUnited StatesBase Metals CommoditiesNordic EconomiesEuro AreaVenezuelaGermanyAustraliaCryptocurrencyCommoditiesSub-Saharan AfricaBrexitLatin AmericaMexicoEconomic Growth (GDP)PortugalEmerging Marketsprecious metalselectionColombiaGoldIranTunisiaInvestmentTurkeySpainInfographicMajor EconomiesInflationAgricultural CommoditiesCanadaFranceVietnamTradeArgentinaIndiaTPPBrazilIMFAfricaAsiaHousing MarketUkraineEurozoneEconomic Debt
PANAMA: Lower global growth and a further deterioration of U.S-China relations remain key downside risks to the out… https://t.co/Ir0XtPaDzD
4 hours ago
EAST ASIA: The East Asian economy is set to decelerate this year as export-driven economies will feel the pain from… https://t.co/N9U48VZnvm
5 hours ago
URUGUAY: The economy shrank 0.2% year-on-year in Q1, contrasting the fourth quarters 0.6% expansion and marking th… https://t.co/9xxtKiOq8D
6 hours ago
🇬🇧 UNITED KINGDOM: Boris Johnson is likely to become Conservative leader—and by extension prime minister—in the com… https://t.co/moL8vowY1U
8 hours ago
11 hours ago
- Which will be the most miserable economies in 2019?
- Only by freeing Nigeria from its dependence on oil can Buhari truly take Africa’s giant to the next level
- An Analysis of President Trump’s 2020 Budget
- The World's Fastest Growing Economies
- President Sebastian Piñera aims to bring his elder brother’s private pension system into the 21st century
- Brexit Scenarios: Consensus of 14 Economic Analysts
- Sweden just formed a new government and approved its 2019 budget: what does it mean for the economy?
- Which countries have the highest public debt levels?
- Predictions for the global economy in 2019 from 13 experts
- Gurdgiev: Predictions for the global economy in 2019
- Daniel Lacalle's ideas for 2019: Change of cycle.
- Vietnam Poised to Profit from Free Trade Agreement Opportunities
- Canada in 2019: Interview with a Top Economic Forecaster
- Pound Sterling 2019 Exchange Rate: Projections from Leading Analysts
- Expectations for Latin America’s Economy in 2019
- Ethiopia and Rwanda: From Destruction to Development
- Key commodities trends to look out for in 2019
- What drove Gulf neighbors to bail out Bahrain?
- The Four Financial Bubbles and Their Impact on the U.S. Economy
- The Poorest Countries in the World
- Italy: The sick man of Europe
- What does Bolsonaro's presidential win mean for Brazil's economic outlook?
- The World's Top 10 Largest Economies
- In Latin America, taxpayers are tapped to shoulder the burden of a bank bailout
- How and when will the next financial crisis happen? - 26 experts weigh in
- China and Africa: A partnership under the spotlight
- The conditions are ripe for a Global Financial Crisis 2.0
- Uncertainty, instability and fear haunt a generation of Argentinians
- 5 things: What to expect for Mexico's economy in 2019
- 5 things: Brazil's economic downturn and what to expect going forward
- Emerging Market Currency Crisis: Everything you need to know
- Which ASEAN countries are most exposed in the event of a U.S.-China trade war?
- 75 Top Economics Influencers to Follow
- Emerging Markets Economic Outlook 2018 and 2019
- The Faces Behind Latin America’s Key Institutions
- 2019 Economic Outlook for the Top Oil Producing Countries
- Is your cup of coffee about to get more expensive going in to 2019?
- The Economic Implications of an Aging Global Population
- Can the Wisdom of the Crowds predict the results of the 2018 World Cup?
- Railway Mania: The Largest Speculative Bubble You’ve Never Heard Of
- From Riches to Rags: Have Cryptocurrencies Crashed for Good?
- Investment looks to Latin America, but forecasts are not encouraging
- Turkey: Erdogan has cemented his grip on power - now what about the economy?
- How can Latin America’s business environment benefit from technological change?
- Mexico: A look at the past, present and future as elections yield AMLO victory
- Italy’s New Populist Government and the Eurozone: Prelude to a Crisis?
- Latin America moves toward increased integration as U.S. protectionism grows
- How can Latin America increase productivity without affecting the quality of employment?
- How will Saudi Arabia's economy benefit from lifting the women's driving ban?
- Which countries are the most prepared for the upcoming digital revolution?
- India Under Pressure from the U.S. on Trade Policy
- The Story of Steel
- Latin America is the World Leader in eCommerce Growth Despite Serious Challenges
- What the TPP means for trade in Latin America
- Elections in Russia: Analysis and Implications
- Nearly a Third of Latin Americans Have No Right to a Pension
- A Look at Healthcare Models Around the World
- Newly-elected Chilean President Sebastian Piñera faces a myriad of challenges - economic and otherwise
- The Economic Effects of Trade Protectionism
- Regional Disparity: The Dark Side of Inequality in Latin America
- Coal: The story of the world's most abundant fossil fuel
- Gold: The Most Precious of Metals (Part 3)
- Venezuela's Electoral Conundrum
- Trump's 1st Year: 95 Analysts Surveyed on U.S. Economy
- The Latest on China and What's in Store for 2018
- An in-depth look at the Eurozone’s booming economy and the challenges that lurk in the shadows
- Increasing poverty in Latin America takes a breather thanks to improving economic dynamics
- Is Spain doing enough to address its high youth unemployment rate?
- Has Latin America gone far enough in reducing barriers to international trade?
- Commodities Outlook: Oil, Natural Gas, Coal, Lead & Tin
- 21 experts tell us what the future looks like for cryptocurrencies and blockchain
- Turkish lira plummets to all-time low on Erdogan’s monetary feud and tense U.S.-Turkey relations
- Copper: The first metal mastered by man
- The Mercosur-EU Free Trade Agreement: Obstacles & Opportunities
- Nigerian Economy Still Treading Water Thanks to Oil Sector
- Elections in Chile: What the results could mean for the economy
- QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate
- Holland’s fragile one-seat majority government targets economic growth at the expense of fiscal sustainability
- South Africa: Economy at a tipping point?
- Latin American Commodities: What’s behind the increase in demand and prices?
- Is the UK really "shackled to a corpse"?
- Spain-Catalonia: 7 economic experts weigh in on how the situation will affect the outlook
- How well is Spain's labor market doing since the crisis?
- Which countries will have the highest and lowest inflation in 2017?
- How vulnerable is Latin America to economic crises today?
- Iron ore facts and common questions answered
- The bulging economic costs of obesity
- How much investment is needed to salvage Latin America’s crumbling infrastructure?
- A Look at the Potential Impact of Brexit on the Dutch Economy
- Emerging Markets Are Kicking Into Higher Gear In 2017
- Why is foreign direct investment in Latin America falling again?
- Bounty or burden? The impact of refugees on European economies is far from clear
- Are Central Banks Nationalising the Economy?
- What’s the future of U.S.-Latin America trade relations?
- Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket
- Are uranium prices making a comeback?
- Taxing the Economy: Achieving a Delicate Balance
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- How will emerging market economies perform in 2017?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
- The Fed and ECB at a crossroads: Unwinding QE
- Spain: The economy that continues to silence the critics
- Latin America: The Most Unequal Region in the World
- The History of OPEC: Has it been a Success?
- FocusEconomics Announces 2017 Analyst Forecast Awards Winners
- Latin America’s rising unemployment bucks nearly decade long trend
- Escape from the Central Bank Trap by Daniel Lacalle
- China's economic rebalancing act: What to look out for in 2017
- Driving Growth in Latin America: Challenges & Priorities
- Is the Global Economy Rebalancing?
- Commodity exporters face challenging times
- Recent Global Events Facilitate Mercosur-Pacific Alliance
- 23 economic experts weigh in: Why is productivity growth so low?
- Mexico's outlook as Trump nears 100-day mark
- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
- The anxiety of the small saver in a world of negative interest rates
- Brexit negotiations. Between Uncertainty and Urgency
- An Economic History of the EU from El Blog Salmón
- Baby Boomin': Implications of high population growth in Latin America
- Survey of International Economists Predicts a Le Pen Defeat in French Elections, Says Macron has Best Economic Plan
- Spain in a global context: developed economy with some challenges
- How much is crime costing Latin America?
- Predictions & Estimates from Economist Daniel Lacalle
- What economy will the new Dutch government inherit?
- “The data is not a true reflection of reality in India” Interview with Société Générale India Economist
- What are the prospects for Emerging Economies in 2017?
- What to expect in Asia for 2017
- Top Economics & Finance Blogs of 2017
- Latam to Resume Moderate Growth in 2017 but Important Risks Plague Outlook
- 4 Key European Elections That Will Impact the Economy in 2017
- How are security concerns and political chaos affecting Turkey’s economy?
- Global growth to edge up in 2017
- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Russian economy update in wake of OPEC deal announcement
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- The Wisdom of the Crowds and the Consensus Forecast
- Can the peso predict the U.S. election results?
- There's no end in sight to the Venezuela crisis
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
- FocusEconomics partners with leading online statistics provider Statista
- China: Recent postive economic data may be papering over the cracks
- Sub-Saharan Africa's 2016 & 2017 growth rates
- The Italian Dilemma: Weak banks pose risk to already faltering domestic demand
- How much money do migrants from Latin America send home?
- The U.S.' (Not So) Mysterious Case of the Missing Men
- What to expect from the G20 economies by 2020
- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit