The Top 25 Economies in the World
A country's gross domestic product (GDP) calculates the total value of finished goods and services produced within its boundaries during a given period, often a year. The most popular method for determining the size of an economy is the GDP.
The expenditure method, which totals expenditures on new consumer goods, new investments, government spending, and the value of net exports to compute GDP, is the most generally used approach.
With the different stages of economic cycles and longer-term economic growth in the background, nations' GDPs vary throughout the majority of the world. Nevertheless, it's worth noting that amidst these ups and downs, the top economies, as measured by GDP, don't budge easily from the positions that they hold.
The latest available annual data for these nations reveals that they started to rebound from the COVID-19 epidemic, which significantly affected economies worldwide. Countries saw record-breaking drops in GDP in 2020 as a consequence of the epidemic, which led to cratered tourism, reduced trade volumes, and closed storefronts because of quarantines.
Most of the top 25 nations saw their GDP grow negatively in 2020, but 2021 GDP figures indicated a comeback from 2020. Since then, most of the economies or nations have been going positively upward.
There are several methods for calculating GDP, including nominal GDP, purchasing power parity (PPP), real GDP, and GDP per capita:
Nominal GDP in Current U.S. Dollars
This is one of the simplest and most widely used methods of calculating and comparing GDP between nations. Using currency market exchange rates, it uses local prices and currencies translated into US dollars. The order of the nations on the top 25 list is usually determined using this approach.
GDP in current US Dollars, adjusted for purchasing power parity (PPP)
Using currency exchange rates, this method of comparing nominal GDP among nations adjusts currencies depending on the basket of commodities purchased there. This method accounts for the disparity in living standards between nations.
This measures how quickly an economy expands by calculating the nominal GDP yearly % rate of growth in local prices and currencies.
GDP Per capita, in Current US Dollars
This is a nation's nominal GDP divided by its population. Instead of overall economic output, GDP per capita assesses how much a nation's economy produces for each individual. This can also serve as a very basic indicator of a country's population's standard of living or income.
Top 25 Economies of the World (By Nominal GDP)
Unless otherwise stated, all references to "GDP" in this list and article are based on nominal GDP expressed in current US dollars. These stats are recorded as of 2021 and may change accordingly in the future.
According to nominal GDP, the US stands in the first position in the list as the world's largest economy. The economy's service sector-which includes "banking", "real estate", "insurance", "professional and commercial services", and "healthcare"-contributes the most to its GDP.
Its relatively open economy approach in the United States makes it easier for foreign direct investment and flexible commercial investment. It is the dominant geopolitical force and produces the majority of the world's reserves, which enables it to maintain a substantial external national debt.
Despite being at the leading edge of technology in many fields, the US economy is increasingly threatened by increasing economic disparity, costs for health care and the social safety net, and declining infrastructure.
The nominal GDP of China is the second-biggest in the world in terms of current dollars and the greatest in PPP. China may be on a path to surpass the US as the world's leading economy by nominal GDP in the forthcoming years, with an annualised rate that consistently surpasses that of the US.
China's economy has gradually opened up over the past four decades, resulting in tremendous economic progress and developments in living standards. Trade and investment, both domestically and internationally, have risen as a result of the government's progressive phase-out of collectivised agriculture and industry, increasing flexibility for market prices, and increased business autonomy.
Due to this and an industrial policy encouraging domestic production, China has become the world's top exporter. Despite these benefits, China still has several major obstacles that it needs to overcome, like a swiftly ageing population and serious environmental damage.
Japan's economy is the world's 3rd-largest. In 2018, its GDP surpassed $5 trillion. Strong government-industry cooperation and cutting-edge technology led to the foundation for Japan's manufacturing and export-oriented economy.
The 4th position in the World's Top Economies list is captured by Germany. The biggest economy in Europe is also Germany. Germany has a highly skilled workforce and is one of the leading exporters of manufactured goods, including "Chemicals", "Machinery", and "Automobiles". Germany's economic expansion, however, confronts some demographic obstacles. Its low fertility rate makes it more challenging to replace its elderly workforce, and its high net immigration levels strain its social safety system.
The economy of United Kingdom is the world's 5th biggest economy. The UK economy is supported by a sizable service industry, especially in the areas of business, insurance, and financial services.
India's economy is the 6th biggest in the world. India has the lowest per-capita GDP on this ranking list due to its enormous population.
The traditional farming and handicrafts of rural India coexist with a thriving contemporary economy and mechanised agriculture. India is a significant exporter of business outsourcing and technological services, and the service industry generates a sizable portion of its GDP.
The GDP of France is ranked seventh in the world. France attracts the most tourists of any country annually, making the tourism sector a significant industry. In its mixed economy, which spans a variety of industries, France has a large number of private and semi-private firms. However, the government continues to have a significant role in several important industries, like the production of electricity and defence.
Italy is in the 8th position among the World's Top Economies. It also has the 3rd-largest economy in the Eurozone (a group of 19 member states of the European Union). Italy's economy and its level of development vary greatly by area, with the north having a more developed industrial economy and the south having a less developed economy. Due to its extremely high public debt, poor banking industry, ineffective labour market with continuously rising youth unemployment, and the sizable underground economy, Italy faces slow economic growth.
In terms of global GDP, it is Canada with a position of 9 on the list. The 3rd largest proven oil reserves in the world are in Canada, which also has a well-developed energy extraction industry. Canada's service and manufacturing sectors are also outstanding and primarily centred in urban regions close to the US border.
South Korea stands in the 10th position on the World's Top economies list. The economy of South Korea is a success story of the 20th century and is now fully established as a developed industrial economy. It is a significant exporter and manufacturer of electronic devices, telecommunications gear, and automobiles.
With this development, South Korea is now confronted with some of the same problems as many other industrialised economies, such as slower growth and an ageing workforce.
Russia stands in the 11th position among the World's Top Economies. In the 30 years since the fall of the Soviet Union, Russia has shifted to a more market-based economy, but government ownership of and involvement in businesses is still common. Being a major exporter of minerals and commodities, including oil and gas, the economy of Russia is very susceptible to fluctuations in global commodity prices.
Brazil is the biggest country in both South America and Latin America and the twelfth biggest economy in the world. The spectrum of Brazil's diverse economy includes heavy sectors like manufacturing automobiles and aircraft and extracting minerals and energy resources. It also has a strong agricultural sector, making it a significant exporter of soybeans and coffee.
The Thirteenth biggest economy in the globe is that of Australia. Australia combines a domestic economy that is relatively open with a vast network of free trade agreements with trading partners across the Asia-Pacific region. This benefits Australia's natural resource industries and agricultural export sectors, but it also makes the country more subject to fluctuations in global commodity prices and demand for energy, metals, and agricultural goods.
Spain's GDP places it as the world's Fourteenth biggest economy. The Great Recession devastated Spain's economy, with unemployment increasing above 25% and the country's debt steadily increasing despite attempts at fiscal austerity. It has rebounded recently due to reduced labour costs and inflation, which have boosted foreign investment and raised the competitiveness of Spain's exports, including manufactured goods and food.
The economy of Mexico ranks 15th in the world. Mexico has become a manufacturing-centric nation over the previous three decades. Mexico supports various exports, including petroleum and agricultural goods, consumer electronics, automobiles, and auto components.
Indonesia is the world's sixteenth-largest economy. Indonesia, the biggest economy in Southeast Asia, relies heavily on sectors that export commodities. Major exports include petroleum and coal, along with agricultural commodities for industrial use, like rubber and palm oil.
The economy of the Netherlands is now ranked seventeenth in the world. The Netherlands is a significant centre for commercial transportation, and it also engages in certain industrial production and the extraction and processing of petroleum. It is the world's 2nd-Largest exporter of agricultural goods and has a highly developed agriculture industry. A sizable portion of the financial services industry also exists in the Netherlands.
The economy of Saudi Arabia ranks 18th in the world. The greatest oil exporter in the world, Saudi Arabia's economy primarily depends on oil. The Saudi government controls and runs a large portion of the nation's major industries through its oil company, Aramco. However, as the goal to advance non-fossil fuel energy sources continues to increase due to global environmental concerns, the nation aims to diversify its economy by promoting greater private investment in healthcare and other service sectors.
The economy of Turkey ranks 19th in the world. Turkey has a sizable manufacturing and service sector and a relatively open economy. Electronics, petrochemicals, and automobile manufacturing are important sectors.
Switzerland ranks as the world's 20th biggest economy. In addition to a significant financial services sector, Switzerland has a substantial high-tech manufacturing industry supported by a highly qualified workforce. For Switzerland, a productive economy with one of the world's greatest per-capita GDPs is enabled by top-notch legal, political, and economic institutions and reliable physical infrastructure.
The economy of Poland is the world's Twenty-first largest. Poland's economy mainly depends on heavy industry, which includes coal mining, shipbuilding, the production of iron and steel, and machinery manufacturing.
Poland was the only EU nation to avoid recession in the wake of the 2008 financial crisis due to its business-friendly environment and solid macroeconomic policies. However, Poland's future growth obstacles include ageing populations and ineffective legal and regulatory frameworks.
The economy of Sweden ranks 22nd in the world. Sweden has a competitive economy with a great standard of living, a blend of free enterprise, and a sizable social welfare state. Sweden's manufacturing sector strongly depends on goods like machinery, automobiles, and telecommunications imports.
The economy of Belgium ranks 23rd in the world. A hub for trade and transportation, Belgium's economy is diversified and includes a mixture of high-tech, industrial, and service sectors.
The economy of Thailand ranks 24th in the world. The Thailand economy benefits from reasonably high-quality infrastructure and rules that support free entrepreneurship and investment. With exports making up approximately two-thirds of its GDP, Thailand relies heavily on exporting goods.
Electronics, agricultural goods, automobiles and components, and food products make up its principal exports. Furthermore, Thailand's tourist sector is also significant. About 10% of its GDP comprises agriculture, although only 30% of its workforce is employed in this industry.
The 25th-largest economy in the world is Ireland. Ireland's export industry from overseas multinational firms is a significant part of its economy. Ireland is a desirable location for international corporations to open offices and for commercial investment due to its low corporate tax rate of 12.5% and its pool of highly skilled people. A strong export market and employment growth also significantly aid its economy.
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