Which Are The 10 Largest Economies In The World?

Our world is an economic playground with countries flexing their manufacturing, production, trade and consumption capabilities in a very dynamic and interdependent global marketplace. The economic cycle can be a roller-coaster, and countries shift around to trump each other to become the most powerful prudence. In short, the world economy is a vast and ever-changing landscape. The biggest global economies are affected by a multitude of factors; as a result, the list of the largest economies in the world keeps on changing. Wars, innovation, geopolitics, trade, etc. are some of the factors that affect the hierarchy of the biggest economies in the world.

A country's economic prowess can be compared via the GDP or Gross Domestic Product and fluctuations in the value of national currencies. GDP denotes the value of the nation's goods and services in a year. In this article, we will look at the 10 largest economies in the world today, and understand the basis of such ranking.

So, without further adieu, let's have a look at the key determinants of the size of an economy.

Measuring The Size Of An Economy

Gross Domestic Product or GDP is one of the key indicators used to measure the size of economies. GDP data is used to arrive at a list of the biggest economies in the world. GDP refers to the aggregate monetary value of all goods and services produced in an economy during a financial year. A higher GDP rate indicates comparatively better financial strength and a stable economic growth outlook.

Global GDP rankings provide a look into the largest economies in the world. Usually, nominal GDP data is used to determine the size of the biggest economies in the world. However, the list can look different for other types of GDP data like GDP (Purchasing Power Parity) and GDP (Per Capita).

Now let’s have a look the the list of top 10 largest economies in the world in terms the latest GDP data. 

Also Read: Evolution Of Indian Economy: 7 Major Highlights (1947-2024)

10 Largest Economies Of The World

Some of the biggest economies in the world have been maintaining their presence in the list of top 10 largest economies in the world for decades, with minor changes every now and then. As per the International Monetary Fund’s (IMF’s) latest GDP data, the top 5 largest economies in the world are the United States, China, Germany, Japan and India¹.

The table below lists the top 10 largest economies in the world in terms of GDP data from IMF’s Wolrd Economic Outlook of April 2024:

Now let’s have a detailed look at the top 10 richest countries in the world, and understand what makes them the biggest economies.

The Top 10 Biggest Economies in the World:

1. The United States of America:

And here is a no-brainer! The US is the world’s biggest economy and it has been bagging this position for the last 149 years and the major reason for the USA's advancement is because of the top-notch infrastructure, a global labor force, and sophisticated industrial policies.

Although the US economy is unquestionably the most powerful, it has been facing some hurdles in the recent past, especially fulled by the COVID-19 pandemic. With various government policies surrounding immigrants and trade wars imposed by the country, it will be interesting to see where this superpower leads its economy in the coming years.

As of now, the trade war between the US and China is not only pulling the economies of these two down but also many other countries that have amicable business relations with either party.

2. People's Republic of China

China had been the fastest-growing trillion-dollar economy in the world for most of the last two decades, only to be dethroned by India in the recent years. An interesting thing to note is that although the USA beats China regarding nominal GDP, China emerges in the top spot when the PPP (Purchasing Power Parity) is compared. The IMF estimates suggest that China’s GDP (PPP) stood at USD 32,931.4 billion in 2023, and is estimated to reach USD 35,291 billion in 2024.

China bags the second spot in terms of GDP ranking due to its brimming manufacturing industry. China is a global exporter of raw materials and manufactured goods for various countries and has been able to maintain its dominant position in the global supply chain. Its success in the industry can be attributed to its strong labor force and the country is often called the 'World's Factory.

30 years ago, China was the 7th largest economy in the world, but since it started reforming its market in the late 1970s, the country has seen an average growth of 10% annually. Certain countries have given hints to reduce trade ties with China at this juncture. Only time will tell how it will impact this super economy. However, following the COVID-19 pandemic, and mishaps in domestic real estate markets, China’s economy has been slowing down in comparison to its past glory of high GDP growth.

3. Germany

Germany is Europe's largest economy and, by the 1980s, the third-largest economy in the world. According to the World Bank, approximately 50% of the economy revolves around manufacturing and exports, and therefore, it is more controlled by global recessions. In fact in 2009, the economy went down by over 5%.

Recently, more halted trade processes and the exit of Britain from the EU have posed challenges to this country's growth.

4. Japan

Japan is a country that has risen above national disaster, economic turmoil, and public debt. It had a very stable economy from 1960 to 1980, after which it spiralled down in the 1990s. However, the country has been able to maintain its strong presence in this list of biggest global economies.

The great recession of 2008 saw an economic downturn in the country, but once they started to recover, the nation was again marred by an earthquake. When former president, Shinzo Abe, came into power, an initiative to revive the economy, popularly known as 'Abenomics', came into existence and in 2019, the economy touched 5 trillion. 

5. India

Surprised to see India with the big fishes?

India is often known as the golden spot of the growing economy. Its growth story started only in the early 1990s and is now the fastest-growing trillion dollar economy in the world, powered by a strong service sector and a growing manufacturing sector. Domestic consumption, however, is a big contributor to India’s GDP, instead of exports like for others in this list. Global financial institutions like the IMF and World Bank have been projecting significant positive growth for India’s GDP for the last few years.

However, in terms of GDP Per Capita, India has performed poorly owing to a large population and increasing income inequality. With a mere USD 2731 GDP per capita, it is far from the other 9 economies in this list of the biggest economies in the world. Besides, in terms of GDP (PPP) India is ranked third globally. 

6. United Kingdom

It's not a surprise that in the late 19th and early 20th centuries, the economy of the UK was up and running, thanks to colonialism.

World War 2 saw this superpower strain economically, but eventually, it gained momentum. The economy had recently been up-trend, barring the 2008 financial crisis, which pulled the economy down by 6%. Currently, Brexit poses a threat to the European as well as global economy, especially fuelled by the woes of the COVID pandemic. The service sector, contributing to approximately 75% of its GDP, may face backlash.

7. France

The seventh-largest economy in the world, France has an incredible standard of living, with a GDP of approximately USD 3.13 trillion. However, the World Bank published that unemployment has been soaring in the country. Additionally, tourism is an important source of revenue for the country, which is now more or less stagnant, and has been battered by the pandemic.

8. Brazil

Brazil is the largest Latin American country and the eighth-largest economy in the world. Although natural disasters (frequent forest fires) and internal political turmoil have hampered the economy, the nation is set to grow steadily in the coming years as well.

9. Italy

Italy has been facing political turmoil, enhanced by the pandemic. On the bright side, however, steady exports keep the economy going. In recent years, the tourism industry in Italy has witnessed a surge after facing hughes losses during the COVID lockdowns.

10. Canada

In 2015, Canada beat Russia to grab the 10th spot. As of now, Canada is growing steadily and has recently crossed the USD 2 trillion mark.

It is working towards bettering its economy by curbing unemployment and allocating money towards sectors like manufacturing. However, like other in this list, Canada too has been facing increasing pressure on its economy triggered by the pandemic. Housing costs in Canada are at an all time high.

Conclusion

In this article we have seen the top 10 biggest economies in the world in terms of Gross Domestic Product or GDP data as reported by the IMF in its World Economic Outlook report of April 2024. The top five biggest economies in the world in terms of GDP are the United States, followed by China, Germany, Japan and India. 

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References:

1. IMF <https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD> 

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