There are different indices for the measurement of a country’s wealth. One of such is by using the Gross Domestic product, GDP of the country. GDP is an estimate of the total value of goods and services produced in a country during a specified period. The GDP gives an overview of the economic activities of a particular country. GDP Growth rate estimates how fast the economy of a particular country is growing. This post highlights the top 10 largest economies in the World.
As an entrepreneur looking for countries with viable economy to invest in, It is important you understand the economic land. Countries wit robust economies have expanded markets for businesses to grow.
Based on the most recent data available from the International Monetary Fund, IMF, we have compiled the list of the top 10 largest economies in the world.
What are the largest economies in the world?
According to the International Monetary Fund, these are the highest ranking countries in the world in nominal GDP:
- United States (GDP: 20.49 trillion)
- China (GDP: 13.4 trillion)
- Japan: (GDP: 4.97 trillion)
- Germany: (GDP: 4.00 trillion)
- United Kingdom: (GDP: 2.76 trillion)
- France: (GDP: 2.71 trillion)
- India: (GDP: 2.72 trillion)
- Italy: (GDP: 1.99 trillion)
- Brazil: (GDP: 1.85 trillion)
- Canada: (GDP: 1.73 trillion)
1. United States of America
- Nominal GDP: $20.89 trillion
- GDP Per Capita: $63,413.5
- PPP GDP: $20.89 trillion
As at February [wpdts-year], the U. S. A. has the highest economy in the world and has been in this position since 1871. The USA has a nominal GDP of $20.89 trillion. The GDP purchasing power parity (PPP) is also $20.89 trillion. Additionally, the United States is ranked second in the world for the approximate value of natural resource.
The success of the country’ economy could easily be attributed to a number of factors. But most notably, the major contributor to the country’s economy is the service sector. U.S.A. has a fantastic service industry which include, finance, real estate, insurance, professional and business services, and healthcare.
The entrepreneurial environment in the US encourages hard work and long hours and the result us visible in the general output. The economy is relatively open and this attracts foreign direct investment in the USA. Surely, the USA is a choice destination if you want to invest. There is a wide and open market for you there.
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- Nominal GDP: $13.40 trillion
- PPP GDP: $24.27 trillion.
- GDP Per Capita: $10,434.8
China has experienced steady and progressive increase in the country’s economy. There is ranking increase from ninth, in 1978, to second, in 2022. China has the world’s second largest nominal GDP and the largest in terms of PPP.
China’s annual growth consistently outpaces that of the United States, and very soon, China may be on track to become the largest economy in the world by nominal GDP in the years to come.
Over the past four decades, China started operating a progressively open economy. The living standards have also improved and allows for a more flexible market prices that have attracted foreign direct investments. China has also emerged as the world’s number one exporter and is increasingly having a huge influence on the global economy.
- Nominal GDP: $4.97 trillion
- Per Capita GDP: $39,048
- (PPP) GDP: $5.24 trillion
Japan has the third largest economy in the world with a nominal GDP of $4.97 trillion. The economy is market-driven and so, businesses, production, and prices shift in response to market demand, not government action.
While the 2008 financial crisis took a hit on the Japanese economy and has stunted its growth since then, it is expected that the 2020 Olympics will give it a boost.
A large chunk of the country’s GDP is contributed by its technology industries including electronics and automobile. Japan has the largest electronics industry in the world, and are also the world’s third-largest producers of car.
- Nominal GDP: $4.0 trillion
- PPP GDP: $4.52 trillion
- GDP Per Capita: 46,208.4
With the nominal GDP of $4.0 trillion, Germany has the fourth largest economy in the world. Service industries, including telecommunication, healthcare, and tourism are main contributors to Germany’s GDP.
Germany is one of the few countries in the world to mention when it comes to skilled labour force, highly developed infrastructure, and technological expertise. The country also has a social market economy that emphasizes the value of open-market capitalism.
Germany’s economy is also the largest and strongest in Europe. Germany is a top exporter of vehicles, machinery, chemicals, household equipment, and other manufactured goods.
5. United Kingdom
- Nominal GDP: $2.76 trillion
- PPP GDP: $3.08 trillion
- GDP Per Capita: $41,124.
The United Kingdom rounds the top 5 countries with the largest economies in the world. It has a nominal GDP of $2.76 trillion. The major contributors to the UK economy is the service sector. The service sector, particularly finance, contributes about 80% of the total GDP. London is the second-largest financial center in the world. UK has the second largest economy in Europe, behind Germany.
UK also has other robust sectors that contribute to the GDP, including manufacturing and agriculture. Britain’s aerospace industry is the second-largest in the world and its pharmaceutical industry is the tenth-largest.
- Nominal GDP: $2.72 trillion
- PPP GDP: $8.97 trillion
- GDP Per Capita: $1,927.7
India has the sixth largest economy in the world with a GDP of $2.72 trillion. India leapfrogs France in 2019 to occupy the sixth spot.
The country is developing into an open-market economy from its previous autarkic policies. The economic liberalization began in the early 1990s and included industrial deregulation, reduced control on foreign trade and investment, and privatization of state-owned enterprises. These measures have helped India accelerate economic growth.
India’s service sector is the fast-growing sector in the world accounting for 60% of the economy and 28% of employment. Manufacturing and agriculture are two other significant sectors of the economy.
- Nominal GDP: $2.71 trillion
- GDP per Capita: $39,257
- PPP GDP: $2.95 trillion
France is peculiar for its diversified free-market economy. It has the seven largest economy in the world, and the third in Europe. France has a nominal GDP of $2.71 trillion.
France has a diversified free-market economy. The major contributors to the country’s GDP are the chemical, agriculture and tourism. France is the sixth largest agricultural producer and the second largest agricultural exporter in the world.
France ranks 32 in the World Bank’s 2019 Ease of Doing Business index. There are foreign players in various sectors, and 31 out of Fortune 500 companies are from this prominent EU member. In terms of tourism, France is the most visited destination in the world.
- Nominal GDP: $1.99 trillion
- PPP GDP: $2.49 trillion
- GDP Per Capita: $31,714.247
The world’s eighth largest GDP belongs to Italy at $1.99. strikingly, the level of development as well as the economy in Italy vary by regions. The more developed with more industrial economy is in the north. The underdeveloped region is the south.
Italy is faced with a very high public debt and an inefficient court system, banking sector and inefficient labour market. These factors greatly contribute to the country’s sluggish economy. Unfortunately, Italy is experiencing a relatively high unemployment rate of 9.7% and a debt at 132% of GDP.Among the European nations, Italy is the second-largest exporter, behind Germany. It has a significant trade surplus from exporting machinery, vehicles, food, clothing, luxury goods, and more.
- Nominal GPD: $1.85 trillion
- GDP per Capita: $6,450
- GDP PPP: $3.08 trillion
Brazil has the ninth-largest economy in the world and the largest in Latin America with a nominal GDP of $1.85 trillion. In addition, Brazil is also the largest and most populous nation in Latin America. The country has an estimated $21.8 trillion in natural resources, which includes vast amounts of timber, uranium, gold, and iron.
More so, Brazil has one of the most unequal economies in the world. Six billionaires alone in Brazil are richer than more than 100 million of the poorest Brazilians.
- Nominal GDP: $1.73 trillion
- GDP per Capita: $42,080
- GDP PPP: $1.81 trillion
Canada completes our list if the top 10 largest economies in the world with a nominal GDP of $1.73 trillion. It has the fourth-highest estimated value of natural resources of $33.2 trillion.
Canada is abundantly blessed with natural resources such as petroleum and natural gas. According to the Corruption Perceptions Index, Canada is one of the least corrupt countries in the world and one of the world’s top ten trading countries.
Canada ranks above the United States on the Index of Economic Freedom and experiences a relatively low level of income disparity.