When we say the term largest economies in the world, more or less we will be talking about the GDP of a nation and GDP stands for Gross domestic product. To put a vague idea think like this, a list of the largest economies of the world will be a list of richest countries in the world.
These countries have the highest amount of money being shifted around by its people, government, and organizations, along with export to the global economies, which directly contributes to their own country’s economy and GDP.
Now let’s get right into the top 5 economies in the world and their share in the global economy.
1. USA – Largest Economies In The World
Quite obvious isn’t it? Well, the United States of America has held its position of being the largest economy of the world since 1871. It was expected to reach and become the size of 22.33 trillion dollars by the end of 2020 but then we got hit by a global pandemic.
The U.S is often pronounced as the economic superpower of the globe, due to its share in the global economy which is almost a quarter, backed by the advanced technology and infrastructure, abundant in natural resources and many more factors. Keep in mind that the U.S tops the chart when we compare the nominal GDP, but when it comes to the GDP assessment on PPP purchasing power parity that has to lose its crown to its closest friend china.
2. China – Top 5 Largest Economies
The GDP of China currently sums up to 14.14 trillion and it was expected to grow by 5.8% by the end of 2020. Often called the “factory” of the world china use to get a huge part of its GDP from manufacturing and exports. However, over the span of a few years services had contributed a lot to China’s GDP.
Since its initiations in market reforms back in 1978 the Asian gaunt has climbed up from being 7th largest economy to being number two on the list since then it has seen an average growth of 10% however its pace has been slowed down in the recent years. While this was the assessment of nominal GDP, when GDP on purchasing power parity is coming under consideration, china tops the list. China’s GDP on the grounds of PPP is 27.31 trillion dollars while that of the U.S is 21.44 trillion dollars.
3. Japan – Largest Economies In The World
The land of samurais holds the third-largest economy of the world. Crossing the 5 trillion dollar mark in 2019 and a stimulated growth was expected in the economy seeing the 2020 Olympics will be supposed to keep the investment flow rigid.
The global financial crisis of 2008 shook the booming economy, the crisis triggered a recession followed by weak domestic demand and huge public debt. When its economy was finally recovering Japan was hit by a huge earthquake that shook the nation both on social and economic fronts.
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4. Germany – Top 5 Economies In The World
Not only the Largest but also the strongest economy of Europe standing at 3.86 trillion dollars. The nation has been largely dependent on the export of capital goods which suffered a back hit in the economic crisis of 2008. To channel down its manufacturing strength in the current global scenario, Germany has launched Industrie 4.0—a strategic initiative to establish the country as a lead market and provider of advanced manufacturing solutions.
The fastest-growing trillion dollars economy stands at number 5 on the list of largest economies of the world 2020. With a GDP of 2.94 trillion dollars, India snatched the 5th place surpassing its colonial master United Kingdom in 2019. The subcontinent ranks third when it comes to GDP assessment on purchasing power parity just after its neighbor China and the US.
Today the Indian service sector is the fastest-growing sector in the world accounting for 60% to the economy. With the recent initiatives of the current government like the “Make in India” an upsurge is expected in the manufacturing sector till the end of 2023. Also due to the diplomatic relations of the Indian Prime Minister, India witnessed an increase in FDI in the last few years.
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These were the largest economies of the world and also the largest contributors in the global economy. However, the Post pandemic period doesn’t look very bright on the economic front for almost every country in the world. And, in times like these, we can only hope for the best and a speedy recovery for everyone.