FX.co ★ US economy losing momentum under Joe Biden’s presidency

The US economy puzzles market participants and analysts with patchy macroeconomic indicators. Strong economic metrics are negated by poor ones. Remarkably, under Joe Biden’s presidency, the share of the US in the global economy has fallen to a historic low. This circumstance entails grim conclusions.

According to estimates by the World Bank and the International Monetary Fund, the US share in the global economy has dropped below 15% due to Joe Biden’s administration. By the end of his presidential term, this figure is expected to reach 14.76%. Analysts underscore that it is the lowest level in modern history.

Notably, in 1990, the share of the US in global GDP, calculated by purchasing power parity, was 20.16%. This figure peaked at 21.01% in 1999. At that time, the output of the American economy stood at $9.6 trillion, while the world total was $45.85 trillion.

Subsequently, the proportion of the United States in the global economy shrank. The sharpest decline occurred between 2006 and 2008 when the indicator decreased by 0.6% yearly.

The World Bank and the International Monetary Fund estimated that during Barack Obama's second term, the US share in the global economy rose for the last time. In 2014 and 2015, it increased by a total of 0.31 percentage points, reaching 16.26%. However, these gains could not be maintained. As a result, in the last year of Obama's presidency, the US economy lost momentum. The US share fell to 16.04%. Later, under Donald Trump, the American economy declined further by 0.7 percentage points.

According to WB and IMF estimates, by the end of 2024, the US share in the global economy will decrease by another 0.06 percentage points. All in all, over Joe Biden's entire presidential term, it will have contracted by 0.58 percentage points to 14.76%.

Japan’s economy also got stuck in negative territory. Over the past 33 years, its share in the global economy has decreased by 4.33 percentage points. Meanwhile, China has asserted itself as the leader in terms of economic power, increasing its share by 15 percentage points to 18.76%.