Singapore and Thailand have been identified as two of the world’s “happiest” economies according to the annual Misery Index by Steve Hanke, a Johns Hopkins University economist. Singapore took the second spot globally, just behind Taiwan, achieving a Misery Index score of 2.6. This index gauges the economic conditions experienced by the average citizen. A lower score suggests stable employment, controlled prices, affordable credit, and rising incomes.
Singapore’s high ranking is attributed to a robust labor market characterized by a mere 2.0% unemployment rate, a 1.2% inflation rate, and a real GDP per capita growth of 4.3%. Thailand followed closely in third place, with a score of 3.1, buoyed by low inflation and steady employment. Consumer prices dropped by 0.3%, unemployment was at 0.8%, and the real GDP per capita rose by 2.5%.
Hanke noted that Singapore and Thailand’s stable inflation and reasonably low borrowing costs resulted from prudent management of their money supply. In spite of Thailand’s moderate GDP growth, the falling consumer prices and minimal unemployment imply that the Thai citizens are not experiencing a sluggish economy in their daily lives.
Southeast Asia’s Economic Health
Other Southeast Asian economies also surpassed larger competitors, with Malaysia, Cambodia, and Vietnam ranking in the bottom quintile of the index. The Philippines, Laos, and Indonesia also had commendable performances. However, Myanmar, currently experiencing conflict, was the exception, ranking 14th.
Steve Hanke, who had previously acted as the chief economic advisor to the president of Indonesia, described Southeast Asia as “one of the healthiest economic regions globally.” Nevertheless, he observed that high unemployment and increased bank-lending rates negatively impacted the Philippines’ economic outlook.
Overall, Hanke attributed the region’s economic resilience to pragmatic central banking, generally open trade regimes, and high savings rates funneled into productive investments. He highlighted the Philippine economy’s rapid growth in recent years, particularly before the pandemic, attributing this to its dynamic monetary policies and financial stability.
However, he cautioned that disruptive events like the Gulf conflict could lead to inflationary pressures, with countries heavily reliant on energy imports from the Middle East, such as Thailand and the Philippines, being the most vulnerable.
The Misery Index is calculated using four factors: unemployment, inflation, bank-lending rates (which are added together), and the growth rate of the real gross domestic product (which is subtracted). A total of 178 economies were evaluated, with Venezuela being identified as the most miserable, scoring 556.5 due to the world’s highest inflation rate of 475% and a 35% unemployment rate.
In contrast, Taiwan emerged as the happiest economy with a score of 2.1 – an achievement driven by a high global demand for semiconductors and artificial intelligence hardware, leading to a 9.2% increase in real GDP growth per capita, while keeping unemployment, inflation, and bank-lending rates low.
Questions & Answers
What is the annual Misery Index?
The annual Misery Index is a measure developed by Steve Hanke, an economist at Johns Hopkins University, to gauge the economic conditions experienced by the average citizen. It factors in elements like stable employment, controlled prices, affordable credit, and rising incomes.
Which economies ranked as the “happiest” according to the Misery Index?
Taiwan ranked as the “happiest” economy, followed by Singapore and Thailand in second and third place respectively.
What factors could potentially impact the economic outlook of Southeast Asian countries?
Events like the Gulf conflict, which could lead to inflationary pressures, could impact the economic outlook. Countries heavily reliant on energy imports from the Middle East, like Thailand and the Philippines, are considered the most vulnerable.
