Coming soon
Meet Yodatai! The world’s first Digital Data Assistant. Learn more and get your early invite now!
Ocurrió un error. Detalles Ocultar
Usted tiene páginas sin guardar. Restablecer Cancelar

Deterioration in the real interest rate of an economy can lead to an economic downturn. In essence, if inflation rates exceed the interest rates on lending, the profitability of commercial banks is eroded and lending to businesses and individuals dries up. As a result, the production and consumption of goods and services by these would-be borrowers falters.

  • Most economies at some point experience negative real interest rates. During the 2014-2015 period, Argentina, Japan, Mexico, Ukraine, the United Kingdom, and Venezuela, among other economies, experienced negative real interest rates, meaning that the inflation rate exceeded the lending interest rate.
  • Last July, US real interest rates on the 10-year Treasury bills fell below zero for the first time since 2012. For the economy more broadly, as is the case now, the United States experienced a period of relatively low real interest rates during the 1970s, with a single one-year period - 1975 - falling into negative territory (-1.28 percent).

To complicate matters, the reasons for and repercussions to an economy of low or negative real interest rate depends on a myriad of other factors, including an economy's size and demographic profile, capacity and maturity of its banking system and related financial institutions, demand for safe assets, and other factors. The duration of the low or negative interest rates also affects policy decisions to guard against other economic consequences.

  • A low real interest rate can signal that a country is a low credit risk and has a relatively stable economy, helping to boost economic growth to prevent recession or aid economic recovery. Maintained at a low rate over several years, however, with no return to stronger economic growth will probably trigger other policy responses to address the consequences of low rates throughout an economy including on the health of the banking sector and wealth distribution between economic classes.
  • Negative interest rates, while less optimal, pose a greater threat when nominal lending interest rates are also low, as observed at various points in history in Japan, the United Kingdom, and a handful of other advanced countries.
  • Even more economically disruptive are scenarios in which the negative real interest rate is coupled with high interest rates on lending, such as in Argentina, Brazil, Ukraine, and Venezuela. This scenario is more common among developing economies in which banks dominate the financial system.
World in 2020 Try now

World in 2020

Access and compare forecasts for more than 50 indicators related to a country’s economic, demographic, and energy futures from leading international institutions. Assess the historic quality of forecasts with our Forecast Accuracy Tracking Tool™ and select the most accurate forecast to support your analysis.

Percepciones de datos relacionados

World GDP

In 2016, world's nominal GDP was estimated at $75,213 billion by the International Monetary Fund, up by 2 percent from the previous year. So, global economy starts to rebound from a 5.7% decline of 2015. Moreover, according to IMF's World Economic Outlook, in 2017, economic activity is projected to pick up the pace to grow by 5.7 and reach 2014 level with emerging markets being the main drivers of growth. In real terms, global GDP growth for 2017 is estimated at 3.4%, up from 3% in 2016. Looking at GDP dynamics from 1980 to 2017 allows understanding the cyclical position of the world economy. For example, it can be clearly seen that 2008...

GDP by Country | Statistics from the World Bank, 1960-2015

GDP is the single most commonly referenced figure to cover the entirety of a national economy and its trajectory in a single statistic. Measured on the basis of purchasing power parities (PPP), GDP can be used for comparisons among peer countries. Using purchasing power parity with GDP involves a decrease of bias in economy estimation as PPP takes into account the relative cost of local goods, services and inflation rates of the country. Looking at the GDP figures from historic perspective allows understanding on what phase is the economy of a country at the moment. The data on GDP from the World Bank covers the period for the last half of...

World GDP Ranking 2016 | Data and Charts | Forecast

Global GDP is estimated to has grown by 3.09 percent in 2015 according to IMF World Economic Outlook. In 2016 world economy is continuing to slowly recover and projected to grow at modest 3.16 percent, before picking up to 3.54 percent in 2017. The recovery is driven mainly by developing economies which demonstrated the growth of 3.98 percent in 2015 and are expected to grow by 4.1 percent in 2016. At the same time, growth in advanced economies is estimated to has remained modest at 1.88 percent in 2015 and is projected to decrease to 1.86 percent in 2016. The United States, the largest economy in the world accounting for 24.5 percent of...

International Trade: Countries by Their Major Exports

Concentration Index of Exports estimates to what extent a country relies on a certain group of commodities. Countries, which are over depending on the export of the definite commodity group as a primary source of the foreign income, are vulnerable to changes in global demand because export earning depends on foreign currencies. Countries that are resource-rich are less diversified. These countries did not try to create a greater variety of exported product, and for now, they are dependent on a small number of resources they specified.  Last year Iraq took first place in Export Concentration Index rating, 97% of Iraq's export is Mineral...