When we talk about economies the question comes in our mind how we compare economies? And what are the measures that decide what the size of an economy is? The answer is GDP. GDP stands for Gross Domestic product. GDP reflects the quality of life and living standards of a country’s residents.
There are two methods to calculate GDP, one is nominal GDP and other is purchasing power parity GDP. Today we are presenting the list according to nominal GDP, which is supposed to be the more accurate method. So here is the list of top 10 largest economies in the world in 2021.
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According to International Monetary Fund Canada is the 10th economy in the world in terms of nominal GDP, which is US$1.529 trillion. Canada is a member of Organisation for Economic Co-operation and Development (OECD) and G-8. Canada has a low-income disparity. The economy of Canada is dominated by service sector which provides almost 75% of jobs. Manufacturing, mining and service sector transformed Canada from a rural to urbanized economy. Canada has 13% of global oil reserves. Canada is the net exporter of energy and one of the largest suppliers of the agricultural products along with this Canada is a leading exporter of zinc, uranium, gold, steel, iron ore, coal, and lead.
According to International Monetary Fund Brazil is the ninth largest economy in the world in terms of nominal GDP, which is US$1.798 trillion. In 2014, Brazil entered into recession due to political corruptions and nationwide protests. Corruption costs Brazil almost $41 billion in a year. The unemployment rate in Brazil is 6.2% and it ranked 64th in the world. Brazil has ample natural resources. Brazil is the third largest exporter of agricultural products. From past 150 years, Brazil is the largest producer of the coffee. Major export products are aircraft, electrical equipment, automobiles, textile, footwear, iron ore, steel, soybean, orange juice etc. Brazil is the 10th largest energy consumer in the world and most of the energy generated from renewable sources such as hydroelectricity and ethanol. Tourism is a growing sector in Brazil.
According to International Monetary Fund Italy is the eighth largest economy in the world in terms of nominal GDP, which is worth of US$1.85 trillion. Italy is the founding member of G7, G8, Eurozone and Organisation for Economic Co-operation and Development (OECD). Italy has a capital mixed economy and one of the most industrialized nations of the world. Italy ranked 8th in highest quality of life and 25th in Human Development Index in the world. Itlay is well known for creative and innovative businesses. Some of the worldwide famous brands of Italy are Ferrari most powerful brand in the world and Ferrero Rocher the third largest chocolate producer in the world. Italy has a high-quality automobile, machinery, food and fashion industry. Italy is the top producer of wine and leading producer of olive oil, fruits, and vegetables.
According to International Monetary Funds (IMF), Indian economy is the seventh largest economy in the world in terms of nominal GDP. In 2016, GDP of India was worth US$ 2.256 trillion. India is classified as a newly industrialized country with an average GDP growth rate of approximately 7% over two decades. In long term, Indian economy has a positive perspective due to the young population, low dependency ratio, rising middle class, favorable demographic, healthy savings and investment rates, and increasing integration with the global economy. According to IMF short term and long term perspective of Indian economy are very good and it is the bright spot in the global landscape. India topped first time for World Bank’s growth outlook for 2015-16. Indian service sector is one of the fastest growing sectors with an annual growth rate of around 9% and it contributes 57% of GDP. India has emerged as a major outsourcing destination for IT, BPO and software services. The largest employer of Indian economy is agriculture sector which contributes 17% of GDP. India overtook China and became the fastest growing economy in the world.
According to International Monetary Fund France is the sixth-largest economy in the world in terms of nominal GDP. France is the part of monetary union, Eurozone and European Union single market. Mixed economy of France is a combination of extensive private enterprises with considerable state enterprises and government intervention. Government hold the major ownership in railways, aircraft, electricity, nuclear power and telecommunication but slowly France government is selling its holdings. Insurance and banking sector of France is very strong which has AXA largest insurance company in the world, BNP Paribas largest bank of the world and Credit Agricole sixth largest bank in the world. Fertile land, modern agriculture technology, and the European Union subsidies made France world third largest exporter of agricultural products in the world. 3.8% of the population gets employment from agriculture. France is the top tourist destination in the world with more than 83 million foreign tourists. 37 sites of France are listed in UNESCO’s World Heritage List. Italian artist Leonardo da Vinci’s Mona Lisa is known as the best artwork of the world.
5. United Kingdom
According to International Monetary Fund, United Kingdom is the fifth-largest economy in the world in terms of nominal GDP, which is US$2.629 trillion and comprising 4% of world GDP. United Kingdom is one of the strongest European Union countries in terms of GDP, job creation, and employment. The service sector of United Kingdom contributes around 78% of GDP. London is the largest international financial center in the world. United Kingdom is the ninth largest exporter in the world and sixth largest importer. Top export commodities of UK are gold, cars, gas turbine, refined petroleum etc. and trading partners are United States, Germany, Switzerland, China, and Netherlands.
According to IMF Germany is the fourth largest economy in the world in terms of nominal GDP, which worth US$3.466 trillion. Germany is a part of European single market which represents more than 508 million consumers. Several monetary and commercial policies are set by agreement among European Union members and its legislations. The economy of Germany is a social market economy which has the highly skilled workforce, large capital stock, and low corruption and high in innovations. Germany is the third largest exporter of the world. Service sector of Germany contributes around 71% of its GDP. According to Eurostat unemployment rate in Germany is around 4.7% which is the lowest of all 28 European Union member states. According to Organisation for Economic Co-operation and Development (OECD), Germany has the highest labor productivity level in the world. The automotive industry in Germany is one of the most competitive and innovative in the world. Germany is the third largest exporter of arms in the world; other main exports of Germany are vehicles, chemical goods, machinery, electronics products, pharmaceutical, etc. Well- known international brands of Germany are Mercedes-Benz, BMW, Audi, SAP, Volkswagen, Adidas, Bosch, Deutsche Bank etc.
Japan is the third largest economy in terms of nominal GDP. According to International Monetary Fund GDP of Japan is US$4.938 trillion. GDP growth rate of Japan is 1.7%. Japan is one of the most innovative countries in the world and leading in global patents filings. Japan is the third largest automobile manufacturing country and has largest electronics industry. Population of Japan is declining dramatically which is a matter of concern. The unemployment rate in Japan is around 4%, which is very low. Japan mainly exports vehicles, transportation equipment, auto parts, iron products etc. and import machinery and equipment, fossil fuels, chemicals, raw materials, etc. Main trading partners of Japan are China, United States, South Korea, Hong Kong and Thailand.
According to International Monetary Fund China is the second largest economy in the world with US$11.218 trillion nominal GDP. China is becoming more market-oriented mixed economy where foreign trade is a major focus. Chinese government took a big step to restructure inefficient state-owned enterprises and closed unprofitable enterprises. China is the leading example of state capitalism. China is one of the fastest growing economies in the world with an annual average GDP growth rate of 6.6%. China became the global leader in the manufacturing sector because of high productivity, good infrastructure, and low labor cost. China is the largest energy consumer and oil importer of the world. Fortune’s Global 500 list of The world’s largest corporations has 95 companies from China with US$ 5.8 trillion revenue together in 2014. China has the second-largest number of billionaires. China has a high level of economy inequality where 1% Chinese has more than 25% of the wealth.
1. United States
The economy of United States is a capitalist mixed economy which has plenty of natural resources and high productivity. According to International Monetary Fund, United Stated is the largest economy in the world based on nominal GDP. United States’ economy is worth US$ 18.569 trillion which is 24.5% of whole world’s economy. The growth rate of United States’ economy is approximately 3.3%. United States’ currency dollar is the primary reserve currency of the world. United States is the largest importer and second largest exporter of the world. Largest import commodity is crude oil and the largest export commodity is transportation equipment. Top trading partners of United States are Canada, China, Mexico, Japan, and Germany. Private sector contributes 87% in U.S. economy while government sector contributes 13%. Service sector constitutes 68% of GDP. According to World Bank, United States is number one in the ease of hiring and firing workers and has a smaller employee welfare state. U.S. does not guarantee paid vacation, paid family leaves and paid sick leaves to its workers. United States is the third highest workforce productivity per person in the world. Unites States was significantly affected by global recession from 2008 to 2012 which brought unemployment, bankruptcies, decline in home prices, low consumer confidence, inflation etc.
United States remain at number one and one of the most prosperous economies in the world but this position is under threat from China. Nominal GDP of world’s top 10 economies contributes over 66% of the world’s economy. Most of the countries in the list of top 10 economies in the world are developed economies and are from the western world. Analysts predict that a major shift will occur by 2021 and balance the economic power worldwide. Emerging markets will play an important role in world’s economy within next few years.