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Gross Domestic Product GDP

what is the largest economy in the world

Canada’s free trade relationship with the United States means that three-quarters of Canadian exports head to the U.S. market each year. Canada’s close ties to the United States mean that it has developed largely in parallel to the world’s largest economy. Strong cooperation between government and industry and advanced technological know-how have built Japan’s manufacturing and export-oriented economy. Many major Japanese businesses are organized as networks of interlinked companies known as keiretsu. Coupled with an industrial policy that encourages domestic manufacturing, this has made China the world’s number one exporter.

Countries growing above potential for long periods run the risk of overheating and falling into recession. When a country’s actual growth falls short of potential, by contrast, it fails to make full use of productive resources. The Saudi economy is heavily based on oil and is the world’s largest oil exporter. The map below compiles data on economic growth in ninety-one countries around the world, mainly those that report quarterly data to the International Monetary Fund (IMF). Growth is defined as the rate of change, over the prior twelve months, in each country’s gross domestic product (GDP), which is the total value of goods and services produced there. Italy’s economy and level of development vary notably by region, with a more developed, industrial economy in the north and underdeveloped southern regions.

Argentina isn’t just the winner of the World Cup in 2022, it also has one of South America’s largest economies with a 2021 GDP of $491.49 billion. While inflation is a headwind, economists expect the country’s real GDP to grow by 0.5% in 2023 before rising to 1.8% in 2024. In terms of investing returns, countries that are more stable and advanced in technology, and that grow faster than the other countries generate higher returns for their stock market investors. For instance, the US economy has clearly been the leading the world in technological advancement since the early 80s and its stock market returned slightly more than 10% annually over the last 40 years. That’s why Warren Buffett’s “never bet against America” motto has been working.

In 2022, the country with the smallest GDP was the nation of Tuvalu, which is comprised of nine islands in the South Pacific. The Saudi government has also begun to at least partially privatize Aramco, listing the company https://www.forex-world.net/ on the Saudi Stock Exchange through an initial public offering (IPO) in December 2019. Throughout this list and article, the term GDP refers to nominal GDP in current U.S. dollars unless otherwise specified.

what is the largest economy in the world

Canada has a well-developed energy extraction sector, with the world’s third-largest proven oil reserves. Canada also has impressive manufacturing and service sectors, based mostly in urban areas near the U.S. border. Austria has the world’s 29th largest economy with GDP of $477.08 billion.

South Korea

Potential growth data is calculated based on IMF estimates of each country’s potential GDP. Potential GDP is defined as the maximum output a country can produce, in a given period of time, without causing inflation to rise. Unlike actual GDP, potential GDP cannot be observed directly from the real world. Instead, its value is estimated from trends in a country’s labor supply, capital stock, and productivity level. The data is in millions of international dollars and was calculated and published by the IMF in October 2023.

Positive values on this chart indicate that a country is growing above potential; negative values indicate it is growing below potential. Together, the growth data from each country highlights significant global trends. It shows how the 2008 financial crisis, which began in the United States, triggered major declines in growth across the world. In the first half of 2009, three-fourths of tracker countries saw GDP shrink. By 2016, growth had turned positive in nearly every country, but the global economy began to slow again in 2019. And in early 2020, the COVID-19 pandemic caused a collapse in GDP at a pace comparable to that during the Great Depression.

The second table includes data, mostly for the year 2022, for 180 of the 193 current United Nations member states as well as Hong Kong and Macau (the two Chinese Special Administrative Regions). Data are in millions of international dollars; they were compiled by the World Bank. The third table is a tabulation of the CIA World Factbook GDP (PPP) data update of 2019. The data for GDP at purchasing power parity has also been rebased using the new International Comparison Program price surveys and extrapolated to 2007. Non-sovereign entities (the world, continents, and some dependent territories) and states with limited recognition (such as Kosovo, Palestine and Taiwan) are included in the list in cases in which they appear in the sources. These economies are not ranked in the charts here, but are listed in sequence by GDP for comparison.

  1. If Buffett was born in the Soviet Union and employed a “never bet against Russia” investing approach, he would have failed as an investor.
  2. Instead, its value is estimated from trends in a country’s labor supply, capital stock, and productivity level.
  3. Positive values on this chart indicate that a country is growing above potential; negative values indicate it is growing below potential.
  4. The third table is a tabulation of the CIA World Factbook GDP (PPP) data update of 2019.
  5. If GDP increases, a country might have more goods and services that can improve the quality of living in the country.

European economies like German and the UK are expected to struggle in 2020, a fate they share with industrialized nation Japan. Belgium is a trade and transport hub that has a diversified economy with a mix of services, manufacturing, and high-tech industry. Liberalization of India’s economy since the 1990s has boosted economic growth, but inflexible business regulation, widespread corruption, and persistent poverty pose challenges to ongoing expansion. The Global Growth Tracker allows you to gauge trends in economic growth through time across the globe.

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It’s economy has seen historical growth in the last two decades, causing some economists to speculate that China may overtake the U.S. as the world’s largest economy in the future. The United States’ economy is the largest in the world as measured by nominal GDP. The biggest contributor to that GDP is the economy’s service sector, which includes finance, real estate, insurance, professional and business services, and healthcare. Throughout most of the world, countries’ GDPs fluctuate with the phases of different economic cycles, against a backdrop of longer-term economic growth over time.

what is the largest economy in the world

Countries consistently measure GDP growth as a way to determine how the economy is performing and what actions need to be taken to create steady growth. Because of its deep integration with the rest of the European economy, Belgium is highly sensitive to swings in the overall economic performance of its neighbors. Belgium faces a high public debt burden relative to its GDP, which can constitute an obstacle to growth. France is a mixed economy that has many private and semi-private businesses across a diverse range of industries. However, there is still heavy government involvement in certain key sectors, such as defense and electrical power generation. Because of its large population, India has the lowest per-capita GDP on this list.

With a GDP per capita of $93,457.44 in 2021, Switzerland ranks as one of the wealthiest nations by income. Given its GDP of $812.87 billion in 2021, Switzerland also has https://www.currency-trading.org/ one of the larger economies in the world. GDP, PPP factors in the price difference of goods and services in different countries when calculating the total product.

In many emerging market countries, the price of goods and services cost less than the price of the same goods and services do in the United States. As a result, nominal GDP doesn’t fully reflect the amount of goods and services produced in those countries. To more accurately reflect the purchasing power, GDP, PPP makes adjustments.

The Fight Against Inflation

Countries began to recover in 2021 from massive GDP drops in 2020 due to the COVID-19 pandemic, which had a major impact on economies around the world. Overall, countries continued that growth in 2022, which saw global GDP go from $96.88 trillion in 2021 to $100.56 trillion in 2022. Turkey had a GDP of $815.27 billion in 2021 and a GDP, PPP of $2.59 trillion in the same year. Given the large difference between the two, there is potential for Turkey’s economy to grow considerably in the future.

Virtual, Alternate and Mixed Reality

Australia has a fully developed economy with a GDP per capita of $59,934.13 in 2021, making it one of the wealthiest nations per capita in the Asian Pacific. With a GDP of $1.54 trillion in 2021, Australia also has one of the largest economies in the Asian Pacific. Spain has the https://www.investorynews.com/ fourth largest economy in the EU with a 2021 GDP of $1.43 trillion. In 2022, Spain’s economy likely expanded over 4.4% given government estimates. Although inflation is a headwind, economists think the country’s economy will expand by another 1.3% in 2023 and 1.7% in 2024.

By 2030, India is expected to overtake the U.S. as the second-largest economy on the planet. At that time China is also supposed to be the biggest economy in the world in terms of nominal GDP, a record still held by the U.S. The links in the “Country/Territory” row of the following table link to the article on the GDP or the economy of the respective country or territory. The U.S. has the highest national debt of any country, with $33.8 trillion as of December 14, 2023.

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