A country’s GDP, or gross domestic product, is a measurement of the total monetary worth of all the products and services produced there over a specific time period. GDP is important because it can be used to compare relative economic prosperity between countries and also to measure changes in economic activity within a single country.
By tracking GDP growth rates, economists can gain insights into the health of a nation’s economy. It’s 2022, and the world economy is booming! We look at the top 10 countries with the world’s highest Gross Domestic Product (GDP). Come find out which countries have seen the biggest growth in their economies and what they are doing right to keep it up. Read on to learn more!
Top 15 countries by GDP in 2022
Here are the top 15 countries by GDP in 2022. Join us as we take an eye-opening look at how these economic powerhouses stack up against their global peers. Let’s find out who will be on top of the list!
1. United States
The USA has been the biggest economy on Earth since 1871, with a nominal GDP of $20.89 trillion and a PPP (purchasing power parity) figure of the same amount. It is also ranked second in terms of its approximate value of natural resources, worth an estimated $45 trillion.
This robust economic status owes itself to a number of varied factors, such as the USA’s inclination towards entrepreneurship, which fosters innovation and economic growth. It also has a diverse workforce due to its large population, making it one of the leading manufacturing countries in the world after China. Moreover, its currency is used for many global transactions, further adding to its economic clout.
China is recognized as the second-biggest economy internationally, with an average annual growth rate of 9.52% between 1989 and 2019. Both in terms of nominal GDP ($14.72 trillion) and Purchasing Power Parity (PPP) ($27.31 trillion), China holds the leading spot globally. This economic power is bolstered by its natural resources. The value is approximately $23 trillion, with 90% of these being rare earth metals and coal.
The Chinese economic reform program initiated in 1978 yielded remarkable success and caused average growth rates to rise from 6% to above 9%. This program was focused on establishing private and rural businesses, loosening state oversight of pricing, and investing in the education of the workforce and industrial production. Additionally, improved productivity of labor has been a major factor behind China’s economic prosperity.
Japan is the third-largest economy globally, boasting a GDP of $5.15 trillion and a PPP of $5.75 trillion. Its market-driven system allows businesses, production, and prices to change according to consumer preferences instead of government interference. The 2008 financial crisis impacted Japan’s economic growth, yet it is thought that the 2020 Olympics may help reverse this.
Japan’s impressive economy is largely due to its leading electronics industry and third-largest automobile sector. Yet, several issues need to be addressed in the future, such as a declining population and an exceptionally large debt – currently 236% of GDP – which needs to be managed effectively.
Germany is a prosperous nation with the fourth largest GDP in the world, amounting to $3.85 trillion. Its economy relies heavily on services like telecommunications, healthcare, and tourism for its growth. It employs a social market approach that combines the best of open-market capitalism with provisions for social welfare.
Also, it enjoys the highest ranking worldwide in terms of entrepreneurship due to its efficient labor force, advanced infrastructure, and technological advancement. In 2022, it is expected that the GDP of Germany will further strengthen as the nation continues to focus on economic development.
5. United Kingdom
The UK is the sixth-largest economy in terms of GDP, with a PPP of $2.83 trillion and a per capita GDP of $42,558. The service sector contributes 80% to the country’s GDP, primarily due to its financial services industry.
London is the second-largest financial hub in the world, while manufacturing and agriculture also make substantial contributions. Aerospace and pharmaceuticals are also strong industries within the UK. Projections show that by 2023, the UK will be the seventh-largest economy with a GDP of $3.27 trillion.
France is a major player in the world economy, with an estimated GDP of $2.78 trillion. It has an attractive investment climate due to its robust protection of property rights and efficient regulatory framework.
Exports and imports represent 63% of the country’s GDP, while 31 Fortune 500 companies are based in France. The World Bank rated its ease of doing business as 32 in 2019.
India is one of the largest economy in the world and the largest democracy, composed of 28 states and 8 union territories. The estimated GDP of the country is $2.72 trillion. In recent years, policy changes have enabled India to attract significant foreign direct investments, making it one of the highest GDP countries in 2022.
The government has taken steps toward streamlining business operations by reducing minimum capital requirements and licensing processes. This has allowed India to experience a flourishing manufacturing, technology, and service sector.
With the third-largest economy in the Eurozone and the eighth-largest GDP, Italy is one of the most powerful nations in Europe. Its GDP is projected to be $2.07 trillion. Consumer goods are a major driver of growth of GDP. The share of 61% is from household consumption, 19% from government expenditure, and 17% from the capital formation. Exports and imports account for 30% and 27%, respectively, of GDP.
Brazil is the ninth-largest economy in the world, with a nominal GDP of $1.85 trillion and a per capita GDP of $8,967. The country has an estimated $21.8 trillion worth of natural resources to its name and experienced rapid economic growth between 2000 and 2012. Unfortunately, Brazil also has one of the unequal economies in the world, with six billionaires owning more wealth than 100 million of its poorest citizens. The 2017 economic crisis has only exacerbated this issue.
Canada, the tenth-largest economy in the world, has a nominal GDP of $1.73 trillion and a per capita GDP of $46,260.71. Natural resources are estimated to be worth $33.2 trillion, making Canada an energy superpower with abundant petroleum and natural gas reserves. The Corruption Perceptions Index ranks Canada as one of the least corrupt countries and among the top ten trading nations. The Index of Economic Freedom places Canada above the US. And the GDP is expected to reach $2.13 trillion in 2023, while income inequality remains relatively low.
Why is GDP important?
GDP is like a report card for an economy – tracking how well it’s doing and how much progress it has made. It helps economists measure the size of a country’s economy, assess its economic health, and compare it to others.
GDP tells us about the state of our financial security as citizens in terms of employment, wages, and overall economic well-being. It’s a critical indicator for businesses as to how much people are buying. Also, what industries are growing, and where investment is going.
When GDP is increasing, it suggests that people are buying more products and services. Businesses are investing in new capacities, and the economy is growing. As a result, consumers have more money to spend and businesses are more prosperous. It also reflects greater job security and higher wages for workers. In short, GDP is important because it helps us better understand the health of our economy.