Israel is in 4th place in the world on the "Economist" list of successful economies in 2022

Israel is in 4th place on the "Economist" list of successful economies in 2022
In weighing the indicators of growth, inflation, stock performance, and government debt, Israel leads the list of the 34 richest countries, alongside other surprising winners - Greece, Portugal and Ireland. Germany, despite its political stability, was ranked particularly low.
In financial terms, the past year has been bad for almost everyone. Inflation of 10% in the rich world has eaten away at household incomes. Investors lost a lot when stock markets fell by an average of 20%. However, focusing on the general data hides some surprises: there were countries that went through the crisis relatively well.
To estimate the performance in a comparative manner, the economist will combine information from five economic and financial indicators: GDP growth; annual inflation; the breadth of inflation (the proportion of products in the index that have become more expensive by more than 2%); the performance of the stock market and the change in government debt. The calculation is made for 34 countries, Most of them are developed economies, and they were ranked according to a weighted index of the data.The results are partly surprising.
For the first time in a while, the economic party is concentrated in the Mediterranean region. At the top of the list is Greece. Portugal and Spain, which sank in the debt crisis of the second decade of the century, are also ranked high. In the Eastern Mediterranean, Israel enjoyed success in 2022, despite the political chaos. In contrast, Germany ranks low, despite political stability. Estonia and Latvia, two Baltic states that have been praised in the previous decade for rapid reforms, are at the bottom of the table.
The growth in GDP, or GNP, which measures the domestic economic output of the countries, is the first benchmark. Ireland has grown more than all the countries, although its overall score is not that high. The activity of large multinational companies, which have come to Ireland for the purposes tax, slightly masking the local weakness. In contrast, the US growth figures are misleading in a downward direction: in recent quarters, the administration's statisticians had difficulty gauging the effect of the huge stimulus packages. In Southern Europe, the recovery is attributed to tourism.
The second yardstick is the inflation that occurred in the countries starting at the end of 2021. There are countries that are now enjoying more moderate inflation. In Switzerland, prices rose by only 3%, following a quick response from the central bank at the beginning of the year. Countries that have non-Russian energy sources, such as Spain - which receives natural gas from Algeria and produces electricity from solar panels - recorded lower than average inflation. Relying on Vladimir Putin cost Latvia a 20% price increase.
The breadth of inflation provides a measure of the size of the problem, and the depth of its roots. This is a possible indication of how quickly inflation will decline next year. In Italy, for example, the overall index rose by 11%, but only two-thirds of the basket was above the central bank's inflation target. In Japan, inflation is fading. Britain is more deeply immersed in inflation - and the price in every category of the product basket is rising rapidly.
The feeling of economic security does not come only from the prices in stores. People are also looking at their retirement savings and their stock portfolios. In several countries, it was a terrible year for stocks, bonds and pension portfolios. In Germany and South Korea, the main stock market index fell by almost 20% in 2022, half of the decline in the US. In Sweden the situation was even worse. Norway actually registered an increase this year, as did Great Britain, because many of the companies traded on the London Stock Exchange are boring and stable companies that manage to hold out in times of crisis. Also, the fall in the value of the pound increased its income from exports.
The last yardstick is the change in government debt measured in relation to GDP. There were governments that spent huge budgets to deal with the cost of living crisis. Germany allocated 7% of its GDP to deal with the rising cost of energy, so the debt to GDP increased. In other countries they were reluctant to spend heavily With the help of the high inflation, the public debt has shrunk in the countries of Southern Europe.
Will the gap between the losers and winners of 2022 remain in 2023? Southern Europe suffers from an aging population and large debts, and is expected to return to below-average performance. There is hope that the US and UK will benefit from moderate inflation this year.
Countries that depended on Russian gas suffered more than others. But against the odds, many of them managed to fill their natural gas reserves before winter. The problem is that they paid crazy prices for it. Next year the task will be more difficult. This raises concerns in the Baltic states, but less so in Western Europe. The tourists in Ibiza will probably take care of that.