Gross domestic product (GDP) is the market value of all final goods and services from a nation in a given year. Countries are sorted by nominal GDP estimates from financial and statistical institutions, which are calculated at market or government official exchange rates. Nominal GDP does not take into account differences in the cost of living in different countries, and the results can vary greatly from one year to another based on fluctuations in the exchange rates of the country's currency. Such fluctuations may change a country's ranking from one year to the next, even though they often make little or no difference in the standard of living of its population.
1. United States
GDP – Nominal: $20.89 trillion
GDP per Capita: $63,413
GDP – Purchasing Power Parity (PPP): $20.89 trillion
A number of factors contribute to the success of the United States. An entrepreneurial environment that encourages hard work and long hours certainly helps. But decentralized government, advanced research universities, and favorable regulatory environments also contribute. The United States will likely always be in the top countries by GDP in the world.
2. China
GDP – Nominal: $14.72 trillion
GDP per Capita: $10,434
GDP – Purchasing Power Parity (PPP) : $17,204
The Chinese economy, one of the fastest growing economies of the 21st century, now ranked as the second largest economy in the world, is currently valued at a GDP of $14.86 trillion. With China’s Belt and Road Initiative effectively merging its foreign and economic policy, promotion of using the Chinese Renminbi for the use of settlements has increased. The country is increasingly playing an influential role in the global economy. It has been the largest contributor to global growth since the financial crisis of 2008.
3. Japan
GDP – Nominal: $5.06 trillion
GDP per Capita: $39,048
GDP – Purchasing Power Parity (PPP): $5.24 trillion
Japan’s four main islands – Honshu, Hokkaido, Shikoku, and Kyushu – constitute nearly 98% of its land area. It has the world’s 3rd largest economy by nominal GDP and the 4th largest economy by purchasing power parity (PPP).
Ranked as one of most innovative countries in the world, Japan is the world’s largest electronic goods producer and the 3rd largest automobile manufacturer. The country generally has a surplus in annual trade and international investment. The country’s workforce is highly qualified and skilled, proving to be instrumental in organizational growth. All of these factors contribute to Japan being one of the top countries by GDP.
4. Germany
GDP – Nominal: $3.85 trillion
GDP per Capita: $45,466
GDP – Purchasing Power Parity (PPP): $4.45 trillion
Germany has the 4th largest GDP in the world. The total value of exports and imports is equal to 86.9% of GDP. Germany is a European nation with the biggest drivers of its economy being its service industries, including telecommunication, healthcare, and tourism.
The nation employs a social market economy that emphasizes the value of open-market capitalism and also ensures a number of social services guarantees. The country is ranked #1 in the world for entrepreneurship due to its skilled labor force, highly developed infrastructure, and technological expertise.
5. United Kingdom
GDP – Nominal: $2.76 trillion
GDP per Capita: $39,229
GDP – Purchasing Power Parity (PPP): $2.98 trillion
The United Kingdom (UK), also known as the United Kingdom of Great Britain and Northern Ireland consists of England, Wales, Scotland, and Northern Ireland. It is the 5th largest economy in the world and the 2nd largest in Europe in terms of GDP. The UK ranks high in the annual Global Competitiveness Reports and the World Bank’s Ease of Doing Business Rankings.
6. India
GDP – Nominal: $2.66 trillion
GDP per Capita: $1,877
GDP – Purchasing Power Parity (PPP): $8.68 trillion
The Republic of India is a federal democracy that consists of 28 states and 8 union territories. It is the largest democracy and the 6th largest economy in the world. India has thriving manufacturing, technology, and service sectors. Since 2014, the rate of foreign direct investment (FDI) inflows to India has grown steadily as some key policy changes were incorporated by the government to facilitate this growth. This makes India one of the top countries by GDP in 2022.
Some strategic steps have been taken to stimulate India’s business environment including reforms to remove bottlenecks in key business areas, reducing minimum capital requirement, and simplifying the process of obtaining necessary licenses.
7. France
GDP – Nominal: $2.63 trillion
GDP per Capita: $39,257
GDP – Purchasing Power Parity (PPP): $2.95 trillion
France is the 7th largest economy in the world. It is the most visited destination in the world and consequently has a thriving tourism industry. Also, foreign trade is an essential component of its economy.
The value of imports and exports comprise 63% of the country’s GDP. Strong protection of property rights and an efficient regulatory framework encourage investors. France ranks 32 in the World Bank’s 2019 Ease of Doing Business index. There are foreign players in various sectors, and 31 out of Fortune 500 companies are from this prominent EU member.
8. Italy
GDP – Nominal: $1.88 trillion
GDP per Capita: $30,657
GDP – Purchasing Power Parity (PPP): $2.42 trillion
Italy’s economy is the 3rd largest in the Eurozone and the 8th largest by GDP. In addition to its sizable economy, Italy is one of the most influential countries in Europe; it is a key member of the Eurozone, EU, the G7, the OECD, and the G20.
Italy’s diversified economic growth is propelled by the consumer goods industry. GDP’s expenditure side includes 61% of household consumption, 19% of government expenditure, and 17% of the gross fixed capital formation. Exports of services and goods contribute to 30% of GDP while imports account for 27%, adding 3% to GDP.
9. Canada
GDP – Nominal: $1.64 trillion
GDP per Capita: $42,080
GDP – Purchasing Power Parity (PPP): $1.81 trillion
Canada has a mainly service-based economy. The threshold for foreign investment in Canada is CAD 5 million for direct investments, and CAD 50 million for indirect investments. The country has also been a key member of the World Trade Organization (WTO) since 1995.
It also has extensive trading ties with many nations due to its bilateral and regional Free Trade Agreements (FTAs). A well-educated workforce, multicultural/multilingual coexistence, a thriving economy, and the government’s support for setting up business make Canada a preferred investment destination.
10. South Korea
GDP – Nominal: $1.63 trillion
GDP per Capita: $30,644
GDP – Purchasing Power Parity (PPP): $2.29 trillion
South Korea was considered a developing country until the 1960s. Due to far-reaching economic reforms (referred to as the Miracle of the Hangang River), the country’s economy entered a period of rapid growth (about an annual 10% growth for over 30 years). Today, South Korea‘s GDP is about $2 trillion, and it’s one of the most developed and industrialized countries in the world.
South Korea places great importance on education, innovation and investment into research and development. The country has a highly skilled workforce earning a high median household income. Services provide the majority of the country’s GDP at 59%, with industry is at 38% and agriculture at 2%.
Source: Globalpeoservices
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