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The world’s largest economies form the foundations of global growth and their importance cannot be understated. We have a look at the top ten economies in the world and what keeps them moving.
‘We are moving toward a global economy. One way of approaching that is to pull the covers over your head. Another is to say: it may be more complicated - but that's the world I am going to live in, I might as well be good at it,’ – Philip Condit, former president, chief executive and chairman of Boeing.
Over two-thirds of the world economy is concentrated in just ten countries, making them key to international markets and global growth. The rapid development in emerging markets is hastily changing the landscape so that nations like China and India are overtaking the developed nations, such as the US and those in Europe, who have established themselves as integral cogs in the world engine.
Having compiled data from the International Monetary Fund (IMF), the World Bank, the Index of Economic Freedom, the Observatory of Economic Complexity and national databases, we have a look at the top ten economies:
According to the IMF, the top ten world economies according to gross domestic product (GDP) at current prices in 2017 were as follows:
|Economy||2017 GDP (trillions)||% of world economy||YoY output change|
(Source: International Monetary Fund, GDP based on current prices. Output change from ‘World Economic Outlook: Cyclical upswing, structural change’)
Although the US economy is dominated by the services sector, accounting for about 80% of GDP, the country is still one of the biggest manufacturers in the world and known for expertise in medical, aerospace and military equipment. It is also one of the leaders when it comes to research and development.
Economic growth in the US has been steady in recent years, comfortably outperforming the UK and eurozone. Real estate, financial and insurance services, and health and social care are some of the country’s biggest industries.
An ever-strengthening jobs market has been at the heart of the Federal Reserve’s (Fed’s) debate over when to raise interest rates and, while wage growth has not been as strong, it is expected to pick up as more people become employed, tightening the availability of staff and hopefully pushing up wages.
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The election of US President Donald Trump in late 2016 has seen the government focus on overhauling the tax system, cutting red tape and reviewing trade policies, particularly with its biggest trading partner China.
Population: 324 million
2017 GDP per capita (current prices): $59,500
Trade balance: ($1.38 trillion)
Top exports: Refined petroleum, cars, planes, helicopters/spacecraft, gas turbines
Top destinations for exports: Canada, Mexico, China
Top imports: Cars, crude petroleum, computers, packaged medicaments
Top origins of imports: China, Mexico, Canada
National currency: US dollar
Major stock exchanges: New York Stock Exchange (NYSE), National Association of Securities Dealers Automated Quotation System (NASDAQ)
China is the world’s factory and is by far the biggest manufacturer of goods. Manufacturing is at the heart of the economy, boosted by its role in the global supply chain, which sees it finish-off and export a swathe of partly-finished goods that are imported into the country, particularly from other Asian neighbours. China is expected to overtake the US as the world’s biggest economy as early as 2029.
Still, the behemoth’s agricultural sector is one of the biggest employers in the country. However, the country’s services industry is gradually growing as the country shifts away from producing cheap goods for the world.
Under President Xi Jinping, who has recently consolidated power in the country, China is moving from ‘Made in China’ to ‘Made by China’ by accelerating its technological abilities so it can compete with more advanced Western and Asian countries. While China is still very protective about allowing foreign firms entry into the country, they are increasingly opening up to the rest of the world and is investing in other countries in areas like Africa.
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While growth still outshines the rest of the world, it has slowed in recent years, but data from China can still be regarded as unreliable.
Population: 1.4 billion
2017 GDP per capita (current prices): $8640
Trade balance: $1.88 trillion
Top exports: Computers, broadcasting equipment, telephones, integrated circuits
Top destinations for exports: US, Hong Kong, Japan
Top imports: Integrated circuits, crude petroleum, gold, iron ore, cars
Top origins of imports: Hong Kong, South Korea, US
National currency: Renminbi
Major stock exchanges: Shanghai Stock Exchange, Shenzhen Stock Exchange
Major indices: Shanghai Composite Index, Shenzhen Stock Exchange Component Index
Japan is regarded as the original high-tech economy and at the forefront of Asia until it was overtaken by China in 2010. Automobiles, electronic equipment, shipbuilding, pharmaceuticals and banking are all prominent industries in Japan.
Many of Japan’s modern-day problems centre on demographics, with an aging population and low birth-rate holding back growth. Japanese Prime Minister Shinzo Abe has been in power since 2012 and has introduced ‘Abenomics’ to rejuvenate the economy through monetary easing, flexible fiscal policy and structural reform.
Population: 127 million
2017 GDP per capita (current prices): $38,440
Trade balance: $259 billion
Top exports: Cars, vehicle parts, integrated circuits, industrial printers
Top destinations for exports: US, China, South Korea
Top imports: Crude petroleum, petroleum gas, packaged medicaments, computers
Top origins of imports: China, US, South Korea
National currency: Yen
Major stock exchanges: Tokyo Stock Exchange
Major indices: Nikkei 225, Topix
Germany is the kingpin of the European Union, both politically and economically. The German economy is fuelled by exports of high-quality goods. The automotive industry is the engine of the country, followed by the manufacturing of machinery and chemicals.
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Although Chancellor Angela Merkel has remained the country’s long-standing figurehead, her position has been weakened since her party failed to secure a majority in the 2017 elections, leading to a coalition with the opposing Social Democrats.
Population: 82 million
2017 GDP per capita (current prices): $44,500
Trade balance: $494 billion
Top exports: Cars, vehicle parts, packaged medicaments, planes, helicopters/spacecraft
Top destinations for exports: US, France, UK
Top imports: Cars, vehicle parts, packaged medicaments, computers
Top origins of imports: Netherlands, France, Belgium
National currency: Euro
Major stock exchanges: Deutsche Börse
Major indices: DAX
The UK economy has proven more resilient than most expected following the EU Referendum vote in June 2016, but Brexit will continue to be the dominant feature of the country’s economy in both the short and medium term.
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The UK economy is heavily centred on services, accounting for about 80% of its entire economic output. This includes sectors like hospitality, distribution, transport, communication, and business services and finance (the latter of which has accounted for the bulk of growth in overall services output in recent decades). For context, manufacturing represents just 10% of total output while construction accounts for 6%.
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Population: 66 million
2017 GDP per capita (current prices): $39,730
Trade balance: ($589 billion)
Top exports: Cars, gold, packaged medicaments, gas turbines
Top destinations for exports: US, Germany, France
Top imports: Gold, cars, packaged medicaments
Top origins of imports: Germany, China, US
National currency: Sterling/pound
Major stock exchanges: London Stock Exchange (LSE)
Aside from its neighbour on the other side of the Himalayas, India is the other rising economic power expected to move up this list of top ten economies in the not too distant future. India’s economy is very diverse, from traditional village agriculture to computing.
Services represent about two-thirds of the country’s output, boosted by its mastery of the English language to aid the export of business, IT and communication services. Still, the service sector employs less than a third of the national workforce.
Prime Minister Narendra Modi has provided stability since taking office in 2014, and while foreign policy has improved, the government has had issues with its currency after it scrapped high-value rupee notes causing problems around the country.
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Population: 1.3 billion
2017 GDP per capita (current prices): $1980
Trade balance: ($183 billion)
Top exports: Refined petroleum, diamonds, packaged medicaments, jewellery, gold
Top destinations for exports: US, United Arab Emirates (UAE), Hong Kong
Top imports: Crude petroleum, diamonds, gold, coal briquettes, telephones
Top origins of imports: China, US, Hong Kong
National currency: Rupee
Major stock exchanges: Bombay Stock Exchange, National Stock Exchange of India
Major indices: BSE Sensex, NSE Nifty
France is the other leading nation in the European Union and currently led by Emmanuel Macron, the country’s youngest president since the establishment of the Fifth Republic.
Amid high government spending weighing on public finances and a higher-than-average unemployment rate, Macron is trying to reform the economy at a rapid pace, and not without its consequences. Efforts to restructure labour laws has prompted a series of strikes by public sector employees working in sectors such as transport, for example.
In addition to pharmaceuticals, chemicals and its expertise in aerospace and automotive manufacturing, tourism also plays a significant role in the French economy.
Population: 65 million
GDP per capita (current prices): $39,870
Trade balance: ($163 billion)
Top exports: Planes/helicopters/spacecraft, packaged medicaments, cars, vehicle parts
Top destinations for exports: Germany, Spain, US
Top imports: Cars, aircraft parts, crude petroleum, packaged medicaments
Top origins of imports: Germany, Belgium, Italy
National currency: Euro
Major stock exchanges: Paris Stock Exchange
Major indices: CAC 40
Brazil, much like wider Latin America, has been bogged down in politics and scandals in recent years, holding back the country and the region’s potential. Still, Brazil is a formidable economy on the world stage and the leader of its bloc and has managed to outperform its neighbours.
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Despite its population being largely based on the coast and the fact it is home to the world’s largest rainforest, the country’s agricultural and industry sectors play second fiddle to services (like telecommunications or insurance). Services account for over two-thirds of the economy and the bulk of the remainder is comprised of sectors like petrochemicals, textiles and mining. Agriculture accounts for only a fraction of Brazil’s economy.
Population: 206 million
GDP per capita (current prices): $9890
Trade balance: $106 billion
Top exports: Iron ore, soybeans, crude petroleum, raw sugar, sulfate chemical woodpulp
Top destinations for exports: China, US, Argentina
Top imports: Refined petroleum, vehicle parts, packaged medicaments, telephones
Top origins of imports: US, China, Germany
National currency: Real
Major stock exchanges: B3
Major indices: Brazil 50 Index (IBrX 50)
While the country’s economy remains substantial it is quite split between an industrial-focused north and a less developed south, which is more based on agriculture. This is has been one of the primary causes for the political instability that has made Italy somewhat of a problem child for the European Union, and stoked fears over the future relationship between Italy and the euro (which is particularly prominent amid Brexit and following the breakdown between the EU and Greece).
Population: 61 million
GDP per capita (current prices): $31,980
Trade balance: $152 billion
Top exports: Packaged medicaments, cars, vehicle parts, refined petroleum
Top destinations for exports: Germany, France, US
Top imports: Cars, crude petroleum, packaged medicaments, petroleum gas
Top origins of imports: Germany, France, China
National currency: Euro
Major stock exchanges: Borsa Italiana
Major indices: FTSE MIB
Canada has closely followed a similar economic stance as its larger neighbour to the south (where about two-thirds of all exports go), but after Prime Minister Justin Trudeau’s Liberal Party broke a decade-long Conservative rule in 2015, the country is shifting more toward the likes of environmental policies and shifting away from its large fossil fuel industry (such as oil sands). Forest products like wood, mining, and oil and gas all play formidable roles in the Canadian economy.
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Still, the country has a significant service industry encompassing a growing technology industry (which is concentrated in its major cities) that is continuing to thrive over manufacturing and resource sectors.
Population: 36 million
GDP per capita (current prices): $45,080
Trade balance: ($94.9 billion)
Top exports: Cars, crude petroleum, gold, vehicle parts
Top destinations for exports: US, China, UK
Top imports: Cars, vehicle parts, computers, delivery trucks
Top origins of imports: US, China, Germany
National currency: Canadian dollar
Major stock exchanges: Toronto Stock Exchange
Major indices: S&P/BMV IPC
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