The 10 largest economies worldwide

The entire value of completed products and services produced inside a nation’s boundaries over a given time period, often a year, is calculated as the gross domestic product (GDP). The most common method for determining the size of an economy is to utilize GDP. The most popular technique for measuring GDP is the expenditure approach, which totals expenditures on new consumer items, new investments, government spending, and the value of net exports to determine GDP (exports minus imports).

With the phases of various economic cycles and longer-term economic growth in the background, countries’ GDPs fluctuate throughout the majority of the world. However, it’s interesting to note that despite these ups and downs, the top economies as measured by GDP don’t budge easily from the positions that they hold. Only Thailand and Indonesia were new to the top 25 economies when compared to the top 25 economies in 2000, according to our data. However, the list has seen a few significant movers. In 2000, China occupied the 13th spot; as of 2010, it was in second position.

Continuing down the list, Thailand moved up from 32nd to 24th, while Indonesia, among the previous two additions to the list, jumped from 27th biggest economy in 2000 to 16th. Switzerland dropped from 18 to 20 in 2021 while Saudi Arabia rose from 20 to 18.

The most recent available yearly data for these nations reveals that they started to recover from the COVID-19 epidemic, which had a significant impact on economies all around the world. Countries saw record-breaking drops in GDP in 2020 as a result of Covid, which led to reduced energy costs, cratered tourism, decreased trade volumes, and closed storefronts because of quarantines. The great majority of the top 25 nations had their GDP increase at a negative rate in 2020, while 2021 GDP figures indicate a comeback from 2020.

GDP measurement

Several common methods of calculating GDP are mentioned in this article, all of which are taken from the World Bank database:

Nominal GDP in Today U.S. Dollars: This method of calculating and comparing GDP between nations is the simplest and most often used. It uses local prices and currencies that have been translated into U.S. dollars using currency market currency values. The order of the nations in the top 25 list was determined using this number.

GDP adjusted for purchasing power parity (PPP) in current foreign currency In place of using currency exchange rates, this method of comparing nominal GDP among nations adjusts currencies depending on the basket of commodities that may be purchased there.

This is a method of accounting for the disparity in living standards between nations.

GDP Growth: This measures how quickly an economy is expanding by calculating the nominal GDP yearly percentage growth rate in local prices and currencies.

GDP per person, in present-day dollars: This is a country’s nominal GDP divided by its population. Instead of overall economic output, GDP per capita assesses how much a nation’s economy generates for each individual. This can also serve as a very basic indicator of a country’s population’s level of living or income.

1. The United States of America

According to nominal GDP, the US economy is the biggest in the world. The economy’s service sector, which includes banking, real estate, insurance, professional and commercial services, and healthcare, is the largest contributor to that GDP. Because of its relatively open economy, the United States welcomes international direct investment and flexible business investment. It is the leading geopolitical force in the world and produces the majority of the world’s reserves, which allows it to sustain a sizable external national debt.

Although the U.S. economy leads the world in many fields of technology, it is increasingly threatened by growing economic disparity, rising expenses for healthcare and social safety nets, and decaying infrastructure.

2. Republic of China

In terms of PPP, China has the greatest nominal GDP and the second-largest nominal GDP in the world. China may be on course to overtake the United States as the world’s largest economy by nominal GDP in the years ahead with yearly growth that routinely exceeds that of the US. Over the last four decades, China’s economy has gradually opened up, leading to significant advancements in both economic growth and living standards. Foreign and domestic commerce and investment have exploded as a result of the government’s progressive phase-out of collectivized agribusiness and industry, increasing latitude for market prices, and enhanced company autonomy.

This, together with an industrial policy that supports local production, has elevated China to the top exporter in the world. Despite these benefits, China still has some major obstacles to overcome, including a fast aging population and serious environmental damage.

3. Japan

The third-largest economy on the planet is that of Japan. In 2018, its GDP surpassed $5 trillion. Japan’s industrial and export-focused economy was founded on strong government-industry collaboration and cutting-edge technical know-how. The majority of significant Japanese corporations are set up as keiretsu, which are networks of connected firms. Under the policies of former Japanese Prime Minister Shinzo Abe, Japan has experienced an increase in growth in recent years after the Lost Decade of the 1990s and the effects of the global Great Recession; however, Japan is resource-poor and reliant on energy imports, especially since its nuclear power industry was shut down completely in the wake of the 2011 Fukushima disaster. Japan has similarly battled with a population that is aging quickly.

4. Germany

Germany is the world’s fourth-largest economy. The biggest economy in Europe is also Germany. Germany has a highly qualified workforce and is one of the leading exporters of manufactured products, including chemicals, equipment, and automobiles. Germany’s economic expansion, however, confronts certain demographic obstacles. Its elevated concentrations of net immigration strain its social safety system, and its low birth rate makes replacing its elderly workforce more challenging.

5. The United Kingdom

The fifth-largest economy on the planet is that of the United Kingdom. The U.K. economy is supported by a sizable service industry, especially in the areas of business, insurance, and financial services. The settlement of Brexit following the 2016 vote to leave the European Union has significantly affected the country’s vast commercial connection with continental Europe (EU). The U.K. will no longer be an official member of the EU as of December 31, 2020, but difficult talks about its economic relations are still going on.

6. India

India’s economy is the sixth-largest in the world. India has the weakest per-capita GDP here on list due to its enormous population. The traditional farming and handicrafts of rural India coexist with a thriving contemporary economy and automated agriculture. India is a significant exporter of business outsourcing and technological services, and a sizable portion of its GDP is generated by the service industry. Economic growth in India has been bolstered by economic liberalization during the 1990s, but further progress is threatened by rigid corporate regulations, extensive corruption, and enduring poverty.

7. France

The GDP of France is ranked sixth in the world. France attracts the most tourists of any nation each year, which makes 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 a number of important industries, like the production of electricity and military. The French government’s dedication to economic involvement in support of social equality nevertheless poses significant difficulties for the country’s economy, including a restrictive labor market with high joblessness and a high level of public debt in comparison to other developed countries.

8. Italy

Italy has the eighth-largest GDP in the world. It also has the third-largest economy in the eurozone. The economy and degree of development of Italy differ significantly by area, with the north having a more advanced, industrial economy and the south having a less developed economy. Due to an extremely high public debt, an ineffective justice system, a poor banking industry, an ineffective labor market with continuously high young unemployment, and a sizable underground economy, Italy’s economy has been growing slowly for years.

9. Canada
Canada has the ninth-largest economy in the world. The third-largest known oil reserves in the world are in Canada, which also has a well-developed energy extraction industry. The manufacturing and service industries of Canada are also outstanding, and they are mostly centered in metropolitan regions close to the U.S. border. The United States and Canada have a free trade agreement, so each year, three-quarters of Canadian exports go there. Due to its strong links to the US, Canada has evolved substantially in tandem with the greatest economy in the world.

10. South Korea

South Korea completes the top 10 economies around the world by GDP. The economy of South Korea is a success story of the 20th century and is now firmly established as a sophisticated, industrial economy. South Korea, which is well-known for its export-led economic strategy and the dominance of its chaebols (big business conglomerates), has established a network of free trade agreements over the past several decades that span 58 nations and represent more than three-quarters of the global GDP. 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 industrialized economies, such as weak growth and a shrinking workforce.