Economic cycles and change affect individual countries differently, but the leaders tend to hold their own in all conditions. The world’s strongest economies have not changed dramatically since 1980. Only 3 new nations have emerged in the top 20.
Moreover, the key players retain the majority of the world’s wealth. The top ten economies account for 68% of the world’s nominal GDP and the top twenty account for 81%. The remaining 172 countries produce less than 1/5 of the global economic output.
To compile this ranking, we have analysed IMF (International Monetary Fund) statistics and talked about each country’s economy separately.
The US has maintained its status as the world’s leading economy since 1871. In 2019, in nominal terms, it was worth $21.44 trillion. In 2020, it is projected to be worth $22.32 trillion.
This country is often referred to as an economic superpower because it accounts for almost ¼ of the world economy, is characterised by infrastructure development, technology and an abundance of natural resources. This is despite the fact that 80% of the country’s gross domestic product comes from services.
When assessed on the basis of purchasing power parity, the US is second to the People’s Republic of China in first place and $6 billion behind. The IMF predicts that the gap will widen and that by 2024 the US will have $25.79 trillion and the PRC $39.81 trillion.
The world’s strongest economies are not without the Middle Kingdom. Over the past few decades, China has achieved exponential growth, breaking through the barriers of centralised closed trade. It is now a manufacturing and export hub, sometimes called the “factory of the world”.
In 1980, China was in the top 20 at number seven with $305.35 billion GDP. The US had $2.86 trillion at the time. Thanks to reforms begun in 1978, China actually began increasing 10% of GDP each year. More recently, this pace has slowed, although it remains very high.
The World Bank, referring to China’s jump in economic growth in 2017, refers to the cyclical recovery of global trade. In 2018, the organisation predicted growth of 6.6%, and was right. In 2019, growth was 6.1%. Gradually by 2023, it is estimated to fall to 5.6%.
Because of its large population, China is not among the leaders in GDP per capita – $19,500 (74th place in the world).
The 2008 financial crisis shook the Land of the Rising Sun, as it was accompanied by weak domestic demand and a huge public debt. In addition, there was a major earthquake after the peak that hit the economy and social sphere. But by 2020 Japan’s economy had passed the $5 trillion nominal GDP mark. The forecast by 2021 is $5.59 trillion.
The Japanese economy will be boosted by the 2020 Olympics, which always attracts investment to the host country. The Bank of Japan’s tight monetary policy also contributes to the strengthening.
GDP per capita stood at $45 550 in 2019 – the thirty-first highest in the world.
Germany not only has the biggest, but also the strongest economy in Europe. It is fourth in the world when measured by nominal GDP. GDP at purchasing power parity is $4.44 trillion, and per capita GDP is $53,570 (20th place). In 1980, the German economy was worth $850 billion, enough for third place in the rankings.
Germany was heavily dependent on exports of capital goods and this exacerbated the impact of the 2008 crisis. The economy grew by 2.2% and 2.5% in 2016 and 2017. In 2018 and 2019, it grew by 1.5% and 0.5%. The forecast for 2020 is 1.2%.
Germany’s continued economic strength is supported by the launch of Industry 4.0. This is a strategic initiative to create a leading market and provider of advanced manufacturing solutions for the entire world.
India is the world’s fastest-growing economy, though it has slowed down in recent years. In 2019, it took over fifth place from the UK. Its GDP per capita, however, is far from the top spot at $8,380.
In 1980, the Indian economy was only $189 billion (13th place). The economy grew 6.8% in 2018 and 6.1% in 2019. For 2020, the Navy predicts growth of 7%.
Post-colonial India was initially a purely agrarian state, but has seriously ramped up manufacturing and services in recent decades. Today, services account for 60% of the economy and supply 28% of the labour force.
Industry is the second most important segment and is actively promoted through government initiatives. The agricultural sector accounts for about 17%, but this is still a lot compared to Western countries.
India’s economic advantages right now are its low dependence on exports, high demographics and a growing middle class. This is why India is rightly among the strongest economies in the world.