The results of KPMG's Variables for Sustained Growth (VSG) Survey are in: Luxembourg, sharing a score with the Netherlands and Switzerland, ranks first globally when it comes to drivers of sustained growth. With the exception of Singapore (fourth), New Zealand (fifth), and Hong Kong (eighth), the top ten are all in Western Europe.
The VSG survey was developed in 2013 by members of the KPMG Macroeconomics team, alongside external advisors. It aims to measure the sustainability of a country's growth by gathering and evaluating data in five areas:
- macro stability, measured using government debt and deficit data
- openness to catching up on best practices, measured using FDI stock and total trade scores
- infrastructure, measured using information on quality of transport, technological readiness, and the availability of financial services
- human capital, measured using education statistics and life expectancy data
- strength of institutions, measured using data on regulatory quality, judicial independence, transparency in policymaking, governmental effectiveness, corruption, and business rights
The 2015 survey contains data from 181 countries. Based on the five factors above, the highest ranking countries are:
The full report picks out a few exemplary cases where bringing up numbers in a certain category could be the difference in several GDP growth percentage points. For example, if Mexico could raise its technological readiness score (1.97) to match Luxembourg's (a chart-leading 9.83) then, according to the macroeconomists' calculations, Mexico's GDP could grow annually by 8% more than it otherwise would between now and 2050.
Read the full report for further insights on variables for sustained growth worldwide.
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