Top Economies in the World: Gross Domestic Product (GDP) is a way to estimate the total value of goods and services produced in a country during a specific time, usually a year. It is commonly used to understand the size of a country’s economy and its impact on the global economy.
To calculate GDP, we add up the money spent on new consumer goods, investments, government spending, and net exports (exports minus imports).
Countries’ GDPs fluctuate with different economic cycles, but overall, they tend to grow over time. Interestingly, the top economies ranked by GDP usually remain stable in their positions.
In the year 2000, only two countries in the top 25 economies changed: Thailand and Indonesia joined the list. Some notable movements within the list include China rising from 13th place in 2000 to second place in 2010, and Indonesia moving from the 27th to the 16th spot. Similarly, Thailand moved up from 32nd to 24th place, Saudi Arabia from 20th to 18th, and Switzerland dropped from 18th to 20th.
The most recent available data is from 2021, which indicates that countries were starting to recover from the impact of the COVID-19 pandemic. The pandemic had severe effects on economies worldwide, with decreased energy prices, reduced tourism, lower trade, and closed stores due to quarantines, resulting in significant declines in GDP in 2020.
In 2020, the majority of the top 25 countries experienced negative GDP growth, but there was a recovery shown in the GDP numbers for 2021.
Important Points:
- Gross domestic product (GDP) is the total value of finished goods and services produced within a country’s borders during a specified period.
- There are different ways to measure GDP, such as nominal GDP, real GDP, GDP per capita, and purchasing power parity.
- The U.S. has the largest GDP in the world and China has the second largest.
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Top Economies in the World
This article mentions several popular ways to measure GDP, all of which are drawn from the World Bank database:
- The most basic and common way of measuring and comparing a country’s GDP among countries is Nominal GDP in Current U.S. Dollars. It uses local prices and currencies converted into U.S. dollars using currency market exchange rates. This method determines the countries’ rankings in the top 25 list.
- Purchasing Power Parity (PPP) Adjusted GDP in Current International Dollars is an alternative way of comparing nominal GDP among countries. It adjusts currencies based on the basket of goods they can buy in those countries, rather than using currency exchange rates. This method helps account for the difference in the cost of living among countries.
- GDP Growth represents the annual percentage growth rate of nominal GDP in local prices and currencies. It estimates how fast a country’s economy is growing over a specific period.
- GDP Per Capita, in Current U.S. Dollars, is calculated by dividing nominal GDP by the number of people in a country. This measurement indicates how much a country’s economy produces per person rather than in total. It can also serve as a rough measure of income or standard of living for individuals living in a country.
Throughout the list and article, the term GDP refers to nominal GDP in current U.S. dollars unless stated otherwise.
| Top 10 Countries by Nominal GDP at Current U.S. Dollar Exchange Rates | ||||
|---|---|---|---|---|
| Country | Nominal GDP (in trillions) | PPP Adjusted GDP (in trillions) | Annual Growth (%) | GDP Per Capita |
| United States | $23.0 | $23.0 | 5.7% | $69,287 |
| China | $17.7 | $27.3 | 8.1% | $12,556 |
| Japan | $4.9 | $5.4 | 1.6% | $39,285 |
| Germany | $4.2 | $4.8 | 2.9% | $50,801 |
| United Kingdom | $3.2 | $3.3 | 7.4% | $47,334 |
| India | $3.2 | $10.2 | 8.9% | $2,277 |
| France | $2.9 | $3.4 | 7.0% | $43,518 |
| Italy | $2.1 | $2.7 | 6.6% | $35,551 |
| Canada | $2.0 | $2.0 | 4.6% | $52,051 |
| South Korea | $1.8 | $2.4 | 4.0% | $34,757 |
1. United States
- 2021 Nominal GDP in Current U.S. Dollars: $23.00 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $23.00 trillion
- 2021 GDP Growth: 5.7%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $69,2877
The United States has the largest economy in the world when measured by nominal GDP. The main contributor to this GDP is the service sector, which includes finance, real estate, insurance, professional and business services, and healthcare.
The U.S. economy is relatively open, allowing for flexible business investment and foreign direct investment in the country. It holds significant geopolitical influence and can maintain a large external national debt as it produces the world's primary reserve currency.
The U.S. economy leads in technological advancements in various industries. However, it also faces challenges such as increasing economic inequality, rising costs of healthcare and social safety nets, and deteriorating infrastructure.
2. China
- 2021 Nominal GDP in Current U.S. Dollars: $17.73 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $27.31 trillion
- 2021 GDP Growth: 8.1%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $12,556
China currently holds the world's second-largest nominal GDP in current dollars and the largest when measured by Purchasing Power Parity (PPP). Its annual economic growth consistently surpasses that of the United States, which may potentially lead to China becoming the largest economy in the world by nominal GDP in the future.
Over the past four decades, China has progressively opened its economy, resulting in significant improvements in economic development and living standards. The government's efforts to transition from collectivized agriculture and industry, allowing more flexibility for market prices, and granting businesses greater autonomy have stimulated both foreign and domestic trade and investment.
China's emphasis on domestic manufacturing and its industrial policies have made it the leading exporter in the world. Despite these strengths, China faces notable challenges, including a rapidly aging population and serious environmental degradation.
Source: United Nations Conference on Trade and Development (UNCTAD). "China: The Rise of a Trade Titan."
3. Japan
- 2021 Nominal GDP in Current U.S. Dollars: $4.94 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $5.40 trillion
- 2021 GDP Growth: 1.6%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $ 39,28519
Japan holds the position of the third-largest economy in the world. Its GDP surpassed $5 trillion in 2018. The country's manufacturing and export-oriented economy has been achieved through strong cooperation between the government and industry, along with advanced technological expertise. Many major Japanese businesses are structured as networks of interconnected companies, known as keiretsu.
During the 1990s, Japan experienced a period known as the Lost Decade, and it was further impacted by the global Great Recession. However, in recent years, under the policies of former Prime Minister Shinzo Abe, the country has seen a resurgence in economic growth.
One challenge Japan faces is its lack of abundant natural resources, making it reliant on energy imports. This dependency increased, particularly after the 2011 Fukushima disaster, which led to a general shutdown of its nuclear power industry. Additionally, Japan confronts the issue of a rapidly aging population.
4. Germany
- 2021 Nominal GDP in Current U.S. Dollars: $4.22 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $4.82 trillion
- 2021 GDP Growth: 2.9%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $50,801
Germany holds the fourth position among the world's economies and is also the largest economy in Europe. It is renowned for being a major exporter of vehicles, machinery, chemicals, and other manufactured goods, driven by its highly skilled workforce.
However, Germany encounters certain demographic challenges that impact its economic growth. The country's low fertility rate makes it challenging to replace its aging workforce, and its high levels of net immigration put a strain on its social welfare system.
5. The United Kingdom
- 2021 Nominal GDP in Current U.S. Dollars: $3.19 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $3.34 trillion
- 2021 GDP Growth: 7.4%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $47,334
The United Kingdom has the fifth-largest economy in the world.
The U.K. economy is primarily driven by its significant service sector, particularly in finance, insurance, and business services. However, the nation's extensive trading relationship with continental Europe has become considerably complex due to the resolution of Brexit following the 2016 vote to leave the European Union (EU). As of January 31, 2020, the U.K. is officially not a member of the EU, but negotiations over trade relations between the two continue to be contentious.
6. India
- 2021 Nominal GDP in Current U.S. Dollars: $3.17 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $10.22 trillion
- 2021 GDP Growth: 8.9%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $2,277
India ranks as the sixth-largest economy in the world. Due to its large population, India has the lowest per-capita GDP among the countries listed.
India's economy is a blend of traditional village farming and handicrafts, coexisting with a thriving modern industry and mechanized agriculture. The country is a significant exporter of technology services and business outsourcing, with the service sector contributing substantially to its economic output.
The liberalization of India's economy since the 1990s has led to increased economic growth. However, challenges such as inflexible business regulations, widespread corruption, and persistent poverty continue to pose obstacles to further expansion.
7. France
- 2021 Nominal GDP in Current U.S. Dollars: $2.94 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $3.42 trillion
- 2021 GDP Growth: 7.0%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $43,518
France holds the position of the seventh-largest GDP in the world. Tourism plays a significant role in the country's economy, and France attracts the highest number of visitors compared to any other country annually.
France's economy is a mixed one, with numerous private and semi-private businesses operating in diverse industries. However, the government maintains a strong presence in certain essential sectors like defense and electrical power generation.
The French government's commitment to economic intervention in support of social equality creates certain challenges for the economy. These include a rigid labor market with high unemployment rates and a relatively large public debt compared to other advanced economies.
8. Italy
- 2021 Nominal GDP in Current U.S. Dollars: $2.10 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $2.71 trillion
- 2021 GDP Growth: 6.6%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $35,551
Italy possesses the eighth-largest GDP in the world and is also the third-largest economy within the eurozone.
The economic development and level of prosperity in Italy vary significantly across different regions. The northern regions have a more developed and industrial economy, while the southern regions are relatively underdeveloped.
Italy encounters challenges of slow economic growth due to several factors, including very high public debt, an inefficient court system, a weak banking sector, a labor market with chronically high youth unemployment, and a large underground economy.
9. Canada
- 2021 Nominal GDP in Current U.S. Dollars: $1.99 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $1.99 trillion
- 2021 GDP Growth: 4.6%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $52,051
Canada holds the position of the ninth-largest economy in the world. The country has a well-established energy extraction sector and possesses the world's third-largest proven oil reserves. Additionally, Canada boasts impressive manufacturing and service sectors, primarily concentrated in urban areas near the U.S. border.
Canada's free trade relationship with the United States is significant, with approximately three-quarters of Canadian exports heading to the U.S. market each year. Due to its close ties with the United States, Canada's economic development has largely paralleled that of the world's largest economy.
10. South Korea
- 2021 Nominal GDP in Current U.S. Dollars: $1.80 trillion
- 2021 PPP Adjusted GDP in Current International Dollars: $2.43 trillion
- 2021 GDP Growth: 4.0%
- 2021 Nominal GDP Per Capita in Current U.S. Dollars: $34,757
South Korea ranks among the top 10 economies in the world by GDP.
South Korea's economy is a remarkable 20th-century success story, and it has evolved into a well-established advanced and industrial economy. The country is known for its export-led growth strategy and the dominance of its large business conglomerates, known as chaebols. Over the years, South Korea has established a network of free trade agreements with 58 countries, which collectively account for more than three-quarters of the world's GDP. It has become a major producer and exporter of electronics, telecommunications equipment, and motor vehicles.
Despite its progress, South Korea now faces some challenges typical of other advanced economies, such as slower economic growth and an aging workforce.
What are the 10 top economies in the world?
The 10 top economies in the world were the United States, China, Japan, Germany, India, the United Kingdom, France, Italy, Canada, and South Korea.
What are the 5 top economies in the world?
The 5 top economies in the world were the United States, China, Japan, Germany, and India.
What is the top 5 economy of the world in 2023?
The 5 top economies in the world were the United States, China, Japan, Germany, and India.
Which country has the strongest economy in the world?
United States and China were often considered to have the strongest economies in the world, with China's economy experiencing significant growth in recent years.
