By CALEB SILVER
1. United States
2. China
3. Japan
4. Germany
5. India
6. United Kingdom
7. France
8. Italy
9. Brazil
10. Canada
11. Russia
12. South Korea
13. Australia
14. Spain
15. Mexico
16. Indonesia
17. Netherlands
18. Saudi Arabia
19. Turkey
20. Switzerland
21. Poland
22. Thailand
23. Sweden
24. Belgium
25. Nigeria
Gross domestic product (GDP) is an estimate of the total value of finished goods and services produced in a country’s borders during a specified period, usually a year. GDP is popularly used to estimate the size of a country’s economy. GDP is most commonly measured by using the expenditure method, which calculates GDP by adding up spending on new consumer goods, new investment spending, government spending, and the value of net exports (exports minus imports).
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. However, it’s interesting to see that despite these ups and downs, the top economies as measured by GDP don’t budge easily from the positions they hold. When compared to the top 25 economies in 2000, there are only three countries in the top 25, Thailand, Indonesia, and Nigeria, that weren’t there before. That said, there have been some big movers within the list. China and India moved up into second and fifth place respectively, having been in sixth and 13th place in 2000. Further down the list, Indonesia, one of the three aforementioned newcomers to the list, vaulted forward from 27th largest economy in 2000 to 16th in 2019, while Nigeria leapt from 46th place all the way to 25th.1
While 2019 is the most recent annual data available for these countries, the COVID-19 pandemic has had a major impact on economies across the world. Because it has slashed energy prices, cratered tourism, lowered volumes of trade, and shuttered stores due to quarantines, countries have seen record-breaking declines in GDP. While many economies have begun to recover in the third quarter of 2020, most have not yet recovered to pre-pandemic GDP levels. China is a notable exception, and it’s currently on track to be the only major economy to end 2020 with a larger GDP than it started with.2
This article mentions several popular ways to measure GDP, all of which are drawn from the World Bank database:
Nominal GDP in Current U.S. Dollars: This is the most basic and common way of measuring and comparing GDP between countries, using local prices and currencies converted into U.S. dollars using currency market exchange rates.3 This is the number that was used to determine the countries’ rankings in the top 25 list.
Purchasing Power Parity (PPP) Adjusted GDP in Current International Dollars: This is an alternative way of comparing nominal GDP between countries, adjusting currencies based on what basket of goods they could buy in those countries rather than currency exchange rates. This is a way to adjust for the difference in cost of living between different countries.4
GDP Growth: This is the annual percent growth rate of nominal GDP in local prices and currencies, which estimates how fast a country’s economy is growing.5
GDP Per Capita, in Current U.S. Dollars: This is nominal GDP divided by the number of people in a country. GDP per capita measures how much a country’s economy produces per person, rather than in total. This can also act as a very rough measure of income or standard of living for individuals living in a country.6
Throughout this list and article, the term GDP refers to nominal GDP in current U.S. dollars unless otherwise specified.
Top Ten 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 (in thousands)
United States $21.43 $21.43 2.2% $65,298
China $14.34 $23.52 6.1% $10,262
Japan $5.08 $5.46 0.7% $40,247
Germany $3.86 $4.68 0.6% $46,445
India $2.87 $9.56 4.2% $2,100
United Kingdom $2.83 $3.25 1.5% $42,330
France $2.72 $3.32 1.5% $40,493.9
Italy $2.00 $2.67 0.3% $33,228.2
Brazil $1.84 $3.23 1.1% $8,717
Canada $1.74 $1.93 1.7% $46,195
7
1. United States
2019 Nominal GDP in Current U.S. Dollars: $21.43 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $21.43 trillion4
2019 GDP Growth: 2.2%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $65,2986
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.8
The U.S. has a relatively open economy, facilitating flexible business investment and foreign direct investment in the country. It is the world’s dominant geopolitical power and is able to maintain a large external national debt as the producer of the world’s primary reserve currency. The U.S. economy is at the forefront of technology in many industries, but it faces rising threats in the form of economic inequality, rising healthcare and social safety net costs, and deteriorating infrastructure.9
2. China
2019 Nominal GDP in Current U.S. Dollars: $14.34 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $23.52 trillion4
2019 GDP Growth: 6.1%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $10,2626
China has the world’s second largest nominal GDP in current dollars and the largest in terms of PPP. With annual growth that consistently outpaces the U.S., China may be on track to become the largest economy in the world by nominal GDP in the years to come.1
As China has progressively opened its economy over the past four decades economic development and living standards have greatly improved. As the government has gradually phased out collectivized agriculture and industry, allowed greater flexibility for market prices, and increased the autonomy of businesses, foreign and domestic trade and investment have taken off. Coupled with an industrial policy that encourages domestic manufacturing, this has made China the world’s number one exporter. Despite these advantages, China faces some significant challenges such as a rapidly aging population and severe environmental degradation.10
3. Japan
2019 Nominal GDP in Current U.S. Dollars: $5.08 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $5.49 trillion4
2019 GDP Growth: 0.7%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $40,2476
Japan is the third largest economy in the world. Its GDP crossed the $5 trillion mark in 2019.1 Strong co-operation 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. After the Lost Decade of the 1990’s and the impact of the global Great Recession, Japan has seen an uptick in growth in recent years under the policies of Prime Minister Shinzo Abe. However, Japan is poor in natural resources and dependent on energy imports, especially after the general shutdown of its nuclear power industry following the 2011 Fukushima disaster. Japan has also struggled with a rapidly aging population.11
4. Germany
2019 Nominal GDP in Current U.S. Dollars: $3.86 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $4.68 trillion4
2019 GDP Growth: 0.6%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $46,4456
Fourth among world economies is Germany, with a GDP of $3.86 trillion. Germany is also Europe’s largest economy.1 Germany is a top exporter of vehicles, machinery, chemicals, and other manufactured goods, and has a highly skilled workforce. Germany, however, faces some demographic challenges to its economic growth. Its low fertility rate makes replacing its aging workforce more difficult and its high levels of net immigration put strain on its social welfare system.12
5. India
2019 Nominal GDP in Current U.S. Dollars: $2.87 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $9.56 trillion4
2019 GDP Growth: 4.2%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $2,1006
India is the fifth largest economy in the world, with a GDP of $2.87 trillion in 2019, more than 4% higher than in 2018. Because of its large population, India has the lowest per capita GDP on our list.1 India’s economy is a mixture of traditional village farming and handicrafts alongside booming modern industry and mechanized agriculture. India is a major exporter of technology services and business outsourcing, and the service sector makes up a large share of its economic output. Liberalization of India’s economy since the 1990’s has boosted economic growth, but inflexible business regulation, widespread corruption, and persistent poverty pose challenges to ongoing expansion.13
6. United Kingdom
2019 Nominal GDP in Current U.S. Dollars: $2.83 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $3.25 trillion4
2019 GDP Growth: 1.5%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $42,3306
The United Kingdom has the 6th largest economy in the world. It had a GDP of $2.83 trillion in 2019, up 1.4% from the prior year.1 The U.K. economy is driven by its large service sector, particularly in finance, insurance, and business services. The nation’s extensive trading relationship with continental Europe have been greatly complicated by the resolution of Brexit subsequent to the 2016 vote to leave the European Union.14 As of Jan. 31, 2020 the U.K. is officially not a member of the E.U., but contentious negotiations over trade relations between the two are still ongoing.15
7. France
2019 Nominal GDP in Current U.S. Dollars: $2.72 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $3.32 trillion4
2019 GDP Growth: 1.5%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $40,4946
France had a GDP of $2.72 trillion in 2019, ranking seventh in the world.1 Tourism is an important industry and France receives the most visitors of any country each year. 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. The French government’s commitment to economic intervention in favor of social equality also creates some challenges for the economy such as a rigid labor market with high unemployment and a large public debt relative to other advanced economies.16
8. Italy
2019 Nominal GDP in Current U.S. Dollars: $2.00 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $2.67 trillion4
2019 GDP Growth: 0.3%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $33,2286
The world’s eighth largest GDP belongs to Italy at an even $2.00 trillion, up 0.3% from 2018.1 The eurozone’s third largest economy, Italy’s economy and level of development vary notably by region, with a more developed, industrial economy in the north and underdeveloped southern regions. Italy faces persistently sluggish economic growth due to a very high public debt, an inefficient court system, weak banking sector, an inefficient labor market with chronically highly youth unemployment, and a large underground economy.17
9. Brazil
2019 Nominal GDP in Current U.S. Dollars: $1.84 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $3.23 trillion4
2019 GDP Growth: 1.1%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $8,7176
Brazil is the ninth largest economy in the world and the largest in South America, with a GDP of $1.84 trillion.1 Brazil ‘s diversified economy runs the gamut from heavy industries, such as aircraft and automotive production, to mineral and energy resource extraction. It also has a large agricultural sector that makes it a major exporter of coffee and soy beans. Brazil emerged from a severe recession in 2017 and along the way suffered a series of high level corruption scandals. In the wake of these events, Brazil instituted a series of major economic reforms intended to rein in public spending and debt, invest in energy infrastructure, lower barriers to foreign investment, and improve labor market conditions.18
10. Canada
2019 Nominal GDP in Current U.S. Dollars: $1.74 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $1.93 trillion4
2019 GDP Growth: 1.7%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $46,1956
Canada had $1.74 trillion in GDP in 2019, rounding out the top 10 economies in the world by GDP.1 Canada has a well developed energy extraction sector, with the world’s third largest proven oil reserves. Canada also has impressive manufacturing and services sectors, based mostly in urban areas near the U.S. border. Canada’s free trade relationship with the U.S. means that three-quarters of Canadian exports head to U.S. market each year. Canada’s close ties to the U.S. mean that it has developed largely in parallel to the world’s largest economy.19
11. Russia
2019 Nominal GDP in Current U.S. Dollars: $1.70 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $4.28 trillion4
2019 GDP Growth: 1.3%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $11,5856
Russia is the world’s 11th largest economy, with a GDP of $1.70 trillion as of 2019, 1.3% higher than in 2018.1 Russia has moved toward a more market-based economy over the 30 years since the collapse of the Soviet Union, but government ownership of and intervention in business is still common. As a leading exporter of oil and gas, as well as other minerals and metals, Russia’s economy is highly sensitive to swings in world commodity prices.20
12. South Korea
2019 Nominal GDP in Current U.S. Dollars: $1.65 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $2.23 trillion4
2019 GDP Growth: 2.0%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $31,8466
South Korea, with a GDP of $1.65 trillion in 2019, is the 12th largest world economy.1 South Korea’s economy is a 20th century success story that is today firmly established as an advanced, industrial economy. Known for its strategy of export-led growth and the dominance of its chaebols (large business conglomerates), in recent decades South Korea has built network of free trade agreements that cover 58 countries which account for over three-quarters of the world’s GDP. It is a major producer and exporter of electronics, telecommunications equipment, and motor vehicles. With this progress however, South Korea also now faces some of the same challenges that many other advanced economies are dealing with, including slower growth and an aging workforce.21
13. Australia
2019 Nominal GDP in Current U.S.: $1.40 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $1.36 trillion4
2019 GDP Growth: 2.2%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $55,0606
Australia is the 13th largest economy in the world with a GDP of $1.40 trillion in 2019.1 Australia combines a relatively open domestic economy with an extensive network of free trade arrangements with trading partners all around the Asia-Pacific Rim. This works to the advantages of Australia’s abundant natural resource and agricultural export industries. However, it has also left Australia vulnerable to swings in world commodity demand and prices in energy (coal and natural gas), metals (iron ore and gold), and agricultural products (beef and sheep products).22
14. Spain
2019 Nominal GDP in Current U.S. Dollars: $1.39 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $1.99 trillion4
2019 GDP Growth: 2.0%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $29,6006
Spain had a GDP of $1.39 trillion in 2019, making it the 14th largest economy in the world by GDP.1 Spain’s economy suffered severely during the Great Recession, with unemployment soaring above 25% and a rising national debt despite attempts at fiscal austerity. It has recovered in recent years as moderating inflation and labor costs have encouraged foreign investment and increased the competitiveness of Spain’s exports, including manufactured machinery and foodstuffs. Political instability has hindered the government’s ability to sustain further economic reforms, however.23
15. Mexico
2019 Nominal GDP in Current U.S. Dollars: $1.27 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $2.63 trillion4
2019 GDP Growth: -0.1%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $9,8466
Mexico’s GDP was $1.27 trillion in 2019, making it the 15th largest economy in the world.1 Over the past three decades, Mexico has emerged as a manufacturing economy under a series of free trade arrangements with the U.S., Canada, and 44 other countries. Many major U.S. manufacturers have integrated supply chains with counterparts or operations in Mexico. Mexico supports a variety of exports, including consumer electronics, vehicles, and auto parts, and well as petroleum and agricultural products. The international drug trade constitutes an ongoing challenge to Mexico’s development, which has directly contributed to violence and corruption in the country. Weak legal institutions have made it difficult to regulate and integrate the large informal economy that employs over half of Mexico’s workforce.24
16. Indonesia
2019 Nominal GDP in Current U.S. Dollars: $1.12 trillion3
2019 PPP Adjusted GDP in Current International Dollars: $3.34 trillion4
2019 GDP Growth: 5.0%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $4,1366
Indonesia is the world’s 16th largest economy, with a GDP of $1.12 trillion as of 2019.1 Indonesia’s economy is the largest economy in Southeast Asia, and it is based largely on commodity export industries. Major exports include coal and petroleum products as well as agricultural commodities suitable for industrial use, such as rubber and palm oil. Indonesia has an institutional cap on its national budget deficit, at 3% of GDP, which has led to its relatively low debt burden and investment-grade credit rating. However, regional inequality, lack of infrastructure, and governmental corruption remain problems for Indonesia’s rising economy.25
17. Netherlands
2019 Nominal GDP in Current U.S. Dollars: $907.05 billion3
2019 PPP Adjusted GDP in Current International Dollars: $1.03 trillion4
2019 GDP Growth: 1.7%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $52,3316
The Netherlands stands as 17th largest economy in the world, with a GDP of $907.05 billion.1 The Netherlands is a major commercial transportation hub with some industrial manufacturing as well as petroleum extraction and processing. It has a highly developed agricultural sector and is the second largest agricultural exporter in the world. The Netherlands has a large financial services sector, with assets four times the size of Dutch GDP.26
18. Saudi Arabia
2019 Nominal GDP in Current U.S. Dollars: $792.97 billion3
2019 PPP Adjusted GDP in Current International Dollars: $1.68 trillion4
2019 GDP Growth: 0.3%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $23,1406
Saudi Arabia had a GDP of $792.97 billion in 2019, the 18th largest in the world.1 The Saudi economy is heavily based on oil, and it’s the world largest oil exporter. The Saudi government owns and operates much of the country’s major industry through its oil company Aramco. However, with global environmental concerns driving increasing interest in developing non-fossil fuel energy sources, the Saudis are looking to diversify their economy by encouraging more private investment in healthcare and other service industries. The Saudi government has also begun to at least partially privatize Aramco, launching an IPO for the company in late 2019.27 28
19. Turkey
2019 Nominal GDP in Current U.S. Dollars: $761.43 billion3
2019 PPP Adjusted GDP in Current International Dollars: $2.35 trillion4
2019 GDP Growth: 0.9%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $9,1276
Turkey is the 19th largest economy in the world, with a GDP of $761.43 billion in GDP in 2019.1 Turkey has a largely open economy with large industrial and service sectors. Major industries include electronics, petrochemicals, and automotive production. Political turmoil and involvement in regional armed conflicts have led to some financial and currency market instability and uncertainty around Turkey’s economic future in recent years.29
20. Switzerland
2019 Nominal GDP in Current U.S. Dollars: $703.08 billion3
2019 PPP Adjusted GDP in Current International Dollars: $608.72 billion4
2019 GDP Growth: 0.9%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $81,9946
The Alpine nation of Switzerland had a GDP of $703.08 billion in 2019, making it the 20th largest economy in the world.1 Switzerland has a large service sector, including financial services, and a high tech manufacturing sector served by a highly skilled labor force. High quality legal, political, and economic institutions and solid physical infrastructure set the stage for a productive economy with one of the highest per capita GDPs in the world.30
21. Poland
2019 Nominal GDP in Current U.S. Dollars: $595.86 billion3
2019 PPP Adjusted GDP in Current International Dollars: $1.31 trillion4
2019 GDP Growth: 4.5%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $15,6936
Poland is the 21st largest economy in the world, with a GDP of $595.86 billion.1 Heavy industry, including iron and steel production, machinery manufacturing, shipbuilding, and coal mining, is an important part of Poland’s economy. Poland’s business-friendly climate and sound macroeconomic policies allowed it to be the only EU country to avoid recession in the aftermath of the 2008 financial crisis. However, inefficient legal and regulatory structures and an aging population are challenges for Poland’s ongoing growth in the future.31
22. Thailand
2019 Nominal GDP in Current U.S. Dollars: $543.55 billion3
2019 PPP Adjusted GDP in Current International Dollars: $1.34 trillion4
2019 GDP Growth: 2.4%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $7,8076
Thailand is the 22nd largest economy in the world with a $543.55 billion.1 The Thai economy enjoys relatively high quality infrastructure as well as pro-free enterprise and pro-investment policies. Thailand is highly dependent on exports, which account for about two-thirds of its GDP. Its main exports include electronics, agricultural products, motor vehicles and parts, and food products. Thailand also has a substantial international tourism industry. While its agricultural sector makes up about 10% of its economy, it employs about 30% of its workers.32
23. Sweden
2019 Nominal GDP in Current U.S. Dollars: $530.88 billion3
2019 PPP Adjusted GDP in Current International Dollars: $574.13 billion4
2019 GDP Growth: 1.3%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $51,6156
Sweden, with a GDP of $530.88 billion, is the 23rd largest economy in the world.1 Sweden is a competitive economy with a high standard of living and a mix of free-enterprise alongside a generous social welfare state. Sweden’s manufacturing economy relies heavily on foreign exports, including machinery, motor vehicles, and telecommunications. Sweden has taken in a large number of new immigrants and so faces a short-to-medium term challenge with integrating them into Swedish society and its labor market.33
24. Belgium
2019 Nominal GDP in Current U.S. Dollars: $533.10 billion3
2019 PPP Adjusted GDP in Current International Dollars: $630.53 billion4
2019 GDP Growth: 1.7%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $46,4216
Belgium’s 2019 GDP was $533.10 billion making it the 24th largest world economy.1 Belgium is a trade and transport hub that has a diversified economy with a mix of services, manufacturing, and high tech industry. 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 that can constitute an obstacle to growth.34
25. Nigeria
2019 Nominal GDP in Current U.S. Dollars: $448.12 billion3
2019 PPP Adjusted GDP in Current International Dollars: $1.08 trillion4
2019 GDP Growth: 2.2%5
2019 Nominal GDP Per Capita in Current U.S. Dollars: $2,2306
One of the largest economies in Africa, Nigeria’s economy relies heavily on the oil industry. Nigeria is the largest oil exporter on the continent and also has Africa’s largest reserves of natural gas. Other resource extraction industries, such as coal, tin, and other metal mining, are also important to the Nigerian economy. While oil dominates in terms of contribution to GDP and exports, between a fifth and a half of Nigerians work in agriculture, mostly small-scale subsistence agriculture. Nigeria’s economy has grown rapidly in the past decades, but it also faces significant challenges such as desertification, lack of infrastructure, and government corruption.35 36
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Source: Investopedia.com
