16 Fastest Developing Countries in 2023
This article looks at the 16 fastest developing countries in the world. You can skip our detailed analysis and head straight to the 5 Fastest Developing Countries in 2023.
In 2022, the global economy faced several severe challenges, including the COVID pandemic, the war in Ukraine leading to food and energy crises, high inflation, debt tightening, and the climate emergency. These challenges hit developing countries the most as they relied on cheap global credit to grow.
Despite this, many countries have made significant strides in economic development, and some have even emerged as global economic powerhouses. In this article, we will discuss the top 16 fastest-developing countries in the world and explore the reasons behind their remarkable growth.
Trends in the emerging developing countries
One key trend to observe is that many of the fastest developing countries in the world are located in Asia and Africa. This is unsurprising, given that these regions have experienced significant population growth and urbanization over the past few decades.
For instance, in 2021, India was one of the fastest-developing countries in Asia. Despite the challenges posed by the COVID-19 pandemic, the country's economy rebounded later in the year, with a GDP growth rate of 8.7% for the fiscal year 2021-22. India has implemented measures to attract foreign investment, such as easing restrictions on foreign investment in various sectors and launching initiatives such as "Make in India" to promote domestic manufacturing and exports.
Moreover, many countries on our list of the fastest developing countries in the world have diversified their economies and reduced their reliance on a single sector, such as China and India, which have diverified in manufacturing and services at scale, respectively.
As an example, Rwanda has made significant progress in developing tourism, ICT, and manufacturing sectors while investing in education and infrastructure, resulting in an increased GDP growth rate of 8% in 2022.
The rise of unexpected economies is yet another trend to notice. Countries that were once considered poor or underdeveloped have experienced rapid growth in recent years. For example, Vietnam has seen rapid economic growth since the 1990s due to manufacturing and infrastructure-investment. In 2022, the GDP growth rate of Vietnam reached 8%, making it one of the world's fastest-growing economies.
BRICS is an acronym for Brazil, Russia, India, China, and South Africa, a group of five major emerging economies. These economies are recognized for their rapid economic growth and are home to nearly 40% of the world's population and over a quarter of its landmass.
The BRICS nations, including Russia, have recently indicated a willingness to create a new global reserve currency. This development poses a potential challenge to the global dominance of the US dollar, the world's reserve currency. It also highlights the emerging economies' increasing desire to reduce their reliance on the US dollar and increase the use of their currencies for international trade.
Moreover, BRICS and the SCO are moving closer to de-dollarization, with a growing focus on using local currencies for settlements. Vladimir Norov, the former Secretary-General of the SCO, confirmed last year that the organization's members have been working on a gradual transition to local currency settlements. This shift reflects a broader trend away from the US dollar as the dominant global trade currency.
According to the Times of India, the changing dynamics of the global economy are reflected in the fact that the share of GDP of G7 nations, based on purchasing power parity (PPP), has decreased from 50.42% of the world's GDP in 1982 to 30.39% in 2022. Meanwhile, the share of the GDP of BRICS nations has increased from 10.66% in 1982 to 31.59% in 2022.
Moreover, the uncertainty in global trade has played a significant role in boosting the economies of developing countries, particularly amid the US-China trade war. Vietnam has benefited greatly, as it received the biggest share of US supply chains, at 20%, that shifted from China as part of the trade war. The shift has created jobs, increased exports, and spurred growth in the country's manufacturing sector.
On the corporate front, many multinational companies have played an outsized role in spurring local growth in developing coutnries. For instance, Alphabet Inc. (NASDAQ:GOOG) has four offices in India alone.
Alphabet Inc. (NASDAQ:GOOG) has also been expanding in Africa through the spread of its own network on the continent, as well as through investments in renewable energy. Alphabet Inc. (NASDAQ:GOOG) has also been installing Google Fiber to connect countries like Nigeria, South Africa and others in Africa.
Amazon.com, Inc. (NASDAQ:AMZN) also entered the Vietnamese market a few years back, helping 140 local online e-commerce businesses. Further, Amazon.com, Inc. (NASDAQ:AMZN) also signed an agreement with the Vietnamese government in 2022 to train 10,000 local online retailers over the next five years to sell to the company's global customers.
Methodology
We created a list of the fastest developing countries in the world in 2023 by applying the IMF's definition of developing countries and ranking them based on their 2023 annual percentage change projection in real GDP growth, which were also obtained from the IMF. Countries with a GDP of less than US$1 billion have been excluded, as they are considered economically inconsequential on the global scale even if they are developing at a fast pace. We have also majorly relied on data from the World Bank. The list is presented in ascending order.
16. Uganda
2023 Growth Percentage Change: 5.7%
In 2021, the GDP of Uganda was sized at $40.53 billion. Per Trading Economics, it is estimated that the GDP of Uganda will reach $44.56 billion in 2024 and $62.74 billion in 2025. The economy is anticipated to experience a growth surge of over 6% annually. This growth is predicted to result from a reduction in inflationary pressures, the easing of monetary policy by the Bank of Uganda, and the government's focus on enhancing revenue collection.
15. Vietnam
2023 Growth Percentage Change: 5.8%
In 2021, the Gross Domestic Product (GDP) of Vietnam was worth $366.1 billion. From 2002 to 2021, the GDP per capita rose by 3.6 times, almost reaching $3,700. The poverty rates, based on a threshold of $3.65 per day adjusted for purchasing power parity in 2017, decreased from 14 percent in 2010 to 3.8 percent in 2020. Vietnam’s exceptional growth can be contributed to its manufacturing sector with a special focus on exports-oriented products.
14. Cambodia
2023 Growth Percentage Change: 5.8%
Cambodia's GDP was sized at $26.96 billion in 2021 and has reached an impressive $75 billion in purchasing power parity terms as of the end of 2022. It has shown promising signs of economic recovery following the pandemic, with traditional growth drivers such as manufacturing and agricultural commodity exports fully bouncing back.
13. India
2023 Growth Percentage Change: 5.9%
India's GDP grew by 8.7% in 2021, reaching $3.1 trillion, making it the fastest-growing major economy in the world. Furthermore, India's per capita income has doubled in the last decade, and poverty rates have declined significantly.
The country's dynamic and diverse economy has also attracted considerable foreign investment. As reported by UNESCAP, India received $60 billion of inward Greenfield FDI in 2022, outpacing China. In our list of the fastest growing countries in the world, India has the biggest GDP, making it one of the best-performing economies in the world.
12. Philippines
2023 Growth Percentage Change: 6%
The Philippines' GDP size was $394.1 billion in 2021. In addition, ADB's flagship economic publication Asian Development Outlook (ADO) April 2023, forecasts the Philippines economy to grow by 6.0% in 2023, climbing further by 6.2% in 2024. Further growth is expected to be supported by increased employment and retail trade, expansion in the manufacturing sector, and a rise in public infrastructure spending.
11. Benin
2023 Growth Percentage Change: 6%
Benin, officially the Republic of Benin, is a country in West Africa whose GDP size was $17.14 billion in 2021. According to African Development Bank, it has one of the most substantial economic growth rates in the WAEMU area, with an estimated growth rate of 7.2 % in 2021, an increase of 3.4 percentage points compared to 2020. Benin's economy primarily benefited from its tourism sector and the cotton-production improvement during 2020-2021.
10. Niger
2023 Growth Percentage Change: 6.1%
Niger's GDP was worth $14.92 billion in 2021. Furthermore, the official estimate for Niger's GDP was $32 billion in purchasing power parity terms at the end of 2022. According to African Development Bank, economic growth is projected to accelerate in 2023 to 7.2%, led by agriculture and supported by the new "3N" agricultural initiative with continued public investment in infrastructure and increased FDI in the extractive sector.
9. Ethiopia
2023 Growth Percentage Change: 6.1%
Ethiopia's GDP was worth $111.3 billion in 2021, currently ranked 60th among the major economies. Moreover, the official estimate for Ethiopia's GDP was $291 billion in purchasing power parity terms at the end of 2022. Ethiopia's rise has been primarily driven by increased industrial activity, including investments in infrastructure and manufacturing.
8. Rwanda
2023 Growth Percentage Change: 6.2%
Rwanda's economy showed remarkable resilience and growth, despite the challenges posed by the COVID-19 pandemic. In 2021, the country's GDP stood at $11.07 billion; in the first three quarters of 2022, Rwanda achieved an impressive growth rate of 8.4 percent. The world Bank highlights that Rwanda’s growth was spurred by a resurgent services sector, especially the tourism industry.
7. C?te D'Ivoire
2023 Growth Percentage Change: 6.2%
C?te D’Ivoire is a country on the southern coast of West Africa, whose GDP was worth $70.04 billion in 2021. The economic growth in the country was driven by private consumption, supported by public investment and wage increases. As per Trading Economics estimates, its GDP is expected to reach $74.09 billion by the end of 2023.
6. Democratic Republic of Congo
2023 Growth Percentage Change: 6.3%
Congo's Gross Domestic Product for 2021 was sized at $55.35 billion. The economic growth further picked up to 8.6% in 2022. The mining sector investment and exports were the key growth drivers, owing to capacity expansion and recovery in global demand.
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Disclosure: none. 16 Fastest Developing Countries in 2023 is originally published on Insider Monkey.