The GDP, which is essentially the Gross Domestic Product of a country, is an estimate or measurement of the total value of industrial goods and services produced in the country over a period of time. As a result, growth in the country’s GDP can be considered as its economic growth.
In most countries of the world, countries’ GDP at different stages of the business cycle often fluctuates against the backdrop of long-term economic growth. It is interesting to note, however, that the leading economies measured by GDP do not easily deviate from their positions despite their ups and downs.
Let’s talk about the top 5 economies in the world:
1. United States
The U.S. economy has remained the largest in the world in terms of nominal GDP in 2021. The most significant contribution to this GDP is the financial services sector, which includes finance, real estate, insurance, professional and business services, and healthcare.
China has the second-largest nominal GDP in the world in U.S. dollars and the highest in purchasing power parity. With annual growth consistently exceeding the United States, China could become the world’s largest economy in terms of nominal GDP in the future.
Japan is the third-largest economy in the world. In 2019, GDP exceeded $ 5 trillion1. With close cooperation between government and industry and high-tech expertise, Japanese industry has built and is export-oriented. Many Japanese conglomerates are made up of networks of interconnected companies known as keiretsu.
Germany ranks fourth in the global economy with a GDP of $ 3.86 trillion in 2019. Germany is also the largest economy in Europe1. Germany is a significant exporter of automobiles, equipment, chemicals, and other industrial products and has a highly skilled workforce. However, Germany faces some challenges in terms of economic growth. Low fertility makes it difficult to replace an aging workforce, and high net immigration complicates social security systems 12.
India is the fifth-largest economy in the world, with a GDP of 2.87 trillion U.S. dollars in 2019, an increase of more than 4% over 2018. However, due to its large population, India’s 2019s GDP per capita is the lowest on our list. The liberalization of the Indian economy since the 1990s has promoted economic growth, but limited business regulation, widespread corruption, and persistent poverty have posed challenges to continued expansion.
See also: Top 5 Fastest-Growing Economies 2021