What was claimed
The American economy is growing fast.
Our verdict
US GDP grew 2.3% in real terms in 2017, according to the IMF. That’s faster than the UK but slower than the EU. The IMF expects US growth to slow slightly in the coming years.
Comparing economic growth across the world
What was claimed
The Far East economy is “going gangbusters”.
Our verdict
The GDP of East Asia grew by 5.6% in real terms in 2017 and Southeast Asia grew by 5.3%, according to the IMF. It forecasts growth in East Asia to slow slightly in coming years.
“The reason that I think we should leave the customs union is because I want to have essentially free trade with Europe but also free trade with the rest of the world, with America which is growing fast, with the Far East which is going gangbusters at the moment”
Matt Hancock MP, 26 April 2018
Outside of the customs union, trade with the EU won’t be quite as “free” as it is now. We could have a free trade agreement with Europe that removes tariffs but, unless we’re inside the customs union, goods imported into the EU will need to provide proof of where and how they were made.
Leaving the customs union would allow us to agree our own free trade deals with other countries (you can’t do this as a customs union member). By leaving, we would no longer be a part of existing EU trade deals with other countries, and would face tariffs on trade with other countries until free trade agreements were made.
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Economic growth in other regions
In 2017, the UK’s GDP grew by 1.8% in real terms compared to 2.3% in the USA, 5.6% in East Asia, 5.3% in Southeast Asia, and 2.7% in the EU. That’s according to data from the International Monetary Fund (IMF).
The fastest growing region worldwide (as defined by the IMF) last year was South Asia, with real GDP growth of 6.5%.
The IMF forecasts that these growth rates will stay quite stable over the next few years—although they expect the EU, USA, and East Asia to slow slightly, and South Asia to pick up further.
How much is each economy worth?
In 2017, the USA made up 24% of the world economy, the EU made up 21% (or 18% without the UK), East Asia made up 24%, Southeast Asia made up 3%, and South Asia made up 4%. That’s basing the value of each region’s economy on the current value of the US dollar.
That’s not the only way of measuring an areas’ share of world GDP, but it gives a better impression of the size of these economies as potential export markets at present.