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The 10 biggest economies in the world

Published on: 07/07/2022 | Modified on: 23/01/2023

In this article, we will unravel the world’s top economies in terms of GDP and PPP value, as well as the world’s richest countries measured by GDP per capita. Some of these may surprise you, so continue reading to discover which are at the top of the list.

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  • The top 10 economies in the world contribute to around 66% of the world’s overall GDP.
  • Economists have divided the economy into three sectors of activity: extraction of raw materials, manufactured goods, and services, according to the three-sector model, providing each country with a different avenue of profit.
  • The most common method of measuring a country’s economy is through macroeconomic indicators such as nominal GDP and purchasing power parity (PPP).
  • Global trading has been a popular activity for centuries, allowing interaction between some of the most wealthy and powerful nations in the world.
  • Assets available to trade on the market today include shares, currency pairs, raw materials, global indices, bonds and exchange-traded funds (ETFs).
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How to measure a country’s economy

  1. Look at gross domestic product (GDP). This is the broadest indicator of overall economic activity.
  2. Study unemployment rates. The higher the rate of unemployment, the less demand there will be for goods and services.
  3. Look at the consumer price index (CPI). This is the main measure of inflation in a country at both a consumer and producer level.
  4. Compare nominal GDP with purchasing power parity (PPP). This is the measurement of prices in different countries to compare the purchasing power of each currency relative to one another.
  5. Find rankings for other types of indexes. For example, the Human Development Index takes into account life expectancy, education and per capita income to rank countries in terms of human development. This sometimes corresponds with a country’s GDP, though not always.

In this article, we use both nominal GDP and PPP statistics. The latter takes into account inflation rates of a country, as well as relative costs of goods and services, rather than simple market exchange rates. However, the nominal GDP is more commonly used to represent the overall figure of a country’s economy.

Find out more about macroeconomic indicators​ and how these measures are important for measuring growth, inflation rates and exchange rates of local currencies.

The world’s 10 largest economies

These statistics come from the World Bank based on 2020 estimates. We explain each country in further detail and give examples of related instruments that are popularly traded across the globe.

RankCountryNominal GDPGDP (PPP)
1United States$20.95tn$20.95tn
5United Kingdom$2.76tn$3.12tn
10South Korea$1.64tn$2.34tn

Technically, the European Union has the world’s second largest economy, with an overall nominal GDP of $18.7 trillion. However, this is recognised as a political union and not a separate country; for this reason, it is not included in this list.

Pricing is indicative. Past performance is not a reliable indicator of future results.

1. United States

The United States has held the position of the world’s strongest economy since 1871, after surpassing the United Kingdom at the time. It is known for the following:

  • The United States dollar (USD) is one of the strongest currencies in the world​ and the most popular currency to trade overall, making up major forex pairs such as the EUR/USD, USD/JPY and GBP/USD. For this reason, some traders consider the USD a ‘safe haven’ currency and use it for hedging in periods of political or economic uncertainty.

  • The US is home to some of the largest market cap stocks in the world, including blue-chip companies in diverse sectors such as Amazon, Microsoft, Coca-Cola, Visa and Johnson & Johnson. The New York Stock Exchange (NYSE) and Nasdaq are the top stock exchanges in the world by market capitalisation.

  • It is the world’s largest supplier of crude oil, making up around 20% of the world’s production according to the EIA, overtaking Saudi Arabia for the number one spot in 2013. Many oil rigs are found within the Gulf of Mexico and its neighbouring states, including Texas and Louisiana.

2. China

Although China’s purchasing power parity is of a higher figure, its nominal GDP is significantly less than that of the US, although many consider PPP to be a more indicative and truthful representation of the economy. The nation is known for the following:

  • It’s the world’s largest manufacturer and exporter of goods, as well as the largest country for international trade. The size gap between the US and China’s overall nominal GDP has shrunk significantly over recent years and some market analysts predict that China will one day surpass the US in both nominal GDP and PPP aspects.

  • China’s tech industry is booming and it owns some of the largest websites in the world, including Alibaba, JD.com and Baidu. It’s also a major contributor to the gaming, streaming and 5G industries​.

  • Its agricultural economy accounts for around 10% of the country’s GDP, making the country an all-rounder in terms of global exporting. According to World Atlas, China’s natural resources are worth around $23tn and it’s a leading producer of gold, crude oil, coal, timber and iron ore.

3. Japan

The second Asian nation on this list is Japan, which has a market-driven economy, meaning that business and prices move depending on consumer demand. It is known for the following:

  • Its automotive industry is the third largest in the world, according to OICA, with notable brands such as Mitsubishi, Toyota, Honda, Suzuki and Nissan contributing to overall GDP. These help to make up the Nikkei 225 stock index, a benchmark for the Japanese economy featuring companies listed on the Tokyo Stock Exchange.

  • The country has one of the lowest unemployment rates in the world of just 2.6%, although it also has the highest number of elders in any population worldwide, which economists fear may have a negative impact on Japan’s economy growth in the future. Therefore, the Japanese government are working to keep the elderly population more active and increase the fertility rate, so that the economy is not compromised.

  • The Japanese yen (JPY) is one of the most traded currencies in the world and has an inverse correlation with the Nikkei 225, meaning that when stocks are performing well, the yen appears weaker. Some traders see the JPY as another safe haven currency and choose to hedge it.

4. Germany

Germany is the richest country in Europe, relying heavily on the export of high-quality manufactured goods. According to Statista, it accounts for over 25% of the EU’s total GDP. It is known for the following:

  • There are a variety of sub-sectors represented within the German stock market​, including chemicals, finance, technology, automotive and fashion. The DAX stock index is made up of 30 blue-chip companies listed the Frankfurt Stock Exchange, which is the 10th largest stock exchange in the world by market capitalisation. Adidas, BMW, Deutsche Bank, Merck and SAP are just a few of the established names.

  • Germany’s treasury market contains a range of debt securities and government bonds with maturities of around 10 to 30 years. This includes the long-term Euro Bund, medium-term Euro Bobl and short-term Euro Schatz.

  • The country is a pioneer in the development of renewable energy. According to the International Trade Administration, approximately 45% of the country’s electricity comes from wind, solar, biomass and hydroelectric sources. By 2030, this figure is expected to have reached 65%.

5. United Kingdom

The United Kingdom has one of the world’s most globalised economies and international trade plays an important role in the economy. It was sixth on this list until the start of 2021, when it overtook India for the spot. It is known for the following:

  • The services sector contributes to around 80% of overall GDP according to the ONS, with a particular focus on banking and finance. The UK’s central bank is the Bank of England, which is responsible for setting interest rates and keeping a stable cost of living across the nation.

  • According to the ITA, the UK’s aerospace industry is the second largest in the world with a 16% global market share. The nation has helped to develop many popular aircraft models in collaboration with international manufacturers.

  • One of the most followed stock indices in the world is the FTSE 100, which lists the top UK companies​ by market capitalisation. This index represents the highest performing blue-chip companies in the country within the finance, healthcare and defence sectors.

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6. India

Despite India being sixth on this list, it is actually third in terms of purchasing power parity rankings. The country is known for the following:

  • It has the fastest growing economy in the world and has increased its size by six times since 2000. It can be described as a developing market economy, as it tends to depend on supply and demand from other countries.

  • India is one of the largest commodity suppliers in the world and approximately 66% of the population work in agriculture and food production, according to Statista. The industry contributes to around 18% of the country’s total GDP.

  • Examples of natural resources found throughout the country are milk, fruits and vegetables, seafood, rice, wheat, cattle, sugarcane and cotton. It’s also a leader in textiles, coal and cement production, and a huge exporter of crude oil and natural gas. Read our guide on how to trade commodities​ to find the best trading strategies for our selection of raw materials.

7. France

Aside from being the most visited tourist destination in the world, France has a high GDP per capita, meaning that there is a high standard of living within the country. It is known for the following:

  • It is a world leader in the chemical, pharmaceutical and automotive industries. In particular, Sanofi is the world’s fifth largest pharmaceutical company, Peugeot is the sixth largest car manufacturer and Total is one of the seven oil supermajors.

  • France has a particularly large agricultural presence, accounting for one third of agricultural land in Europe. It is home to high-quality produce, including cheese, wine, poultry, dairy products and wheat, which are some of the main exports.

  • France relies heavily on tourist income for its booming economy, where it accounts for around 10% of nominal GDP, as well as supporting around 11% of domestic employment, according to the French Ministry of Foreign Affairs. Approximately 90 million tourists visit the country each year to experience its fine culture.

8. Italy

Italy’s economy is divided between the north and south regions of the country. Its economic structure relies primarily on manufactured and luxury goods, as well as services. It is known for the following:

  • The highly industrialised north contributes towards the majority of the country’s economy, reflecting automotive, aerospace and other technical industries, whereas the south appears less developed with higher poverty levels and a much higher unemployment rate. The southern regions usually focus on more family-run businesses, as well as the production of textiles, tools and commodities.

  • Following the 2008 financial crisis, Italy had a relatively high unemployment rate of over 13.3%, which mostly affected the younger generations. However, this figured has managed to decrease between 2014 and 2022 to an average of around 8.4%, a considerably lower rate.

  • According to Statista, Italy is the second largest hub for luxury goods in Europe and sixth overall worldwide. Its manufacturing sector comprises of many companies within the “industrial triangle” of Italy: Milan, Turin and Genoa. The country is a leader in high-end fashion, eyewear, watches and jewellery, leather goods, and cosmetics and fragrances.

9. Canada

Canada is considered to be an energy superpower by many as it holds the world’s third highest value of natural resources across the land, including gold, oil and natural gas. The country is known for the following:

  • It is home to some of the largest miners and producers of precious metals, including gold and silver, which has had an enormous effect on its overall economy. Goldcorp was once the largest gold supplier before it merged with US-owned Newmont Corporation in 2019, leading to a rebrand. Canadian companies are often among the most popular with gold traders​ for this reason.

  • The nation has one of the best employment rates worldwide, with an average yearly unemployment rate of around 5-6%. This is partially due to its prominence within the services and manufacturing sectors, as supply and demand is growing consistently, along with opportunities for work.

  • Canada is one of the largest exporters of crude oil and natural gas and it accounts for 10% of the planet’s oil reserves, according to the Canadian government.

10. South Korea

South Korea overtook Brazil in 2021 as the tenth biggest economy in the world. It is known for the following:

  • South Korea is well-known for its dominance of "chaebols" or family-owned companies that are all traded on the Korea Stock Exchange or over the counter for foreign investors. Notable stocks include automotive companies Hyundai and Kia, steel-manufacturer POSCO, and holding companies SK Group and CJ Group.

  • The country has experienced rapid economic development over recent years, due to its strong education system and focus on the technology sector. In particular, South Korean-born telecommunications company Samsung is the largest mobile phone provider in the world, with around 25% of the market share, according to Business Wire.

  • Financial organisations have also noticed the resilience of the South Korean economy against global financial crises, such as the recession of 2007-2008, where it managed to avoid a recession and had a fairly quick recovery. Its economy relies heavily on trade with its main business partners: China, US, Vietnam, Hong Kong and Japan. However, tensions between South and North Korea can often have an impact on its stock market performance and the overall economic health of the nation.

Pricing is indicative. Past performance is not a reliable indicator of future results. Client sentiment is provided by CMC Markets for general information only, is historical in nature and is not intended to provide any form of trading or investment advice - it must not form the basis of your trading or investment decisions.

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What is the richest country in the world?

Although ‘largest economy’ and ‘richest country’ may sound like synonyms, they are quite different in terms of the way they are measured.

The ‘richest countries’ are measured by GDP per capita, which is the wealth (GDP) of the nation divided by the number of inhabitants. This gives insight into the quality of life in a country; if the GDP per capita is high, this tends to reflect a better quality of life.

We’ve listed the top 10 richest countries below; these statistics come from the International Monetary Fund based on 2022 estimates. The list excludes microstates and territories; although there is dispute among various data sources, this is a general representation of the countries with the highest GDP per capita.

RankCountryGDP per capita
6United Arab Emirates$78,255
8United States$76,027

As you can see in the table, only one country from this article features on both lists – the United States. This suggests that although some nations have a very high level of GDP and PPP, this may not be evenly distributed across the population and it doesn’t automatically enhance the residents’ quality of life.

Some of the countries included on this list may have benefitted from the following:

  • Stable economy

  • High wages

  • Low tax rates

  • Large amount of natural reserves

  • Good infrastructure, transport and healthcare systems

  • Booming tourism

  • Low unemployment rate

  • Comprehensive social security system

  • Stable government and political stance

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What else do you need to know before getting started?

Trading on the financial markets can be a daunting process, especially for a beginner, so it may be a good idea to brush up your knowledge on the following things beforehand:

  • Costs​ (including spreads, margin rates, overnight fees, commissions)

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  • How trading with leverage works​ (also known as trading on margin)

  • How to prevent margin calls and account close-outs

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Ever wondered what each country is known for in terms of production and exports? Explore our interactive world trade map​.

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What is gross domestic product?

Gross domestic product (GDP) is the broadest overall indicator of economic activity and growth. GDP reports are released quarterly and measure changes in value from goods and services produced in a country. Learn more about economic indicators.

What is the world’s smallest economy?

The world’s smallest economy as of 2021 belongs to Tuvalu, a Polynesian Island. It has a GDP of around $45m due to the small population, low average income rate, lack of natural resources and lack of capital investment. It therefore has a very low prominence within the financial markets.

Is China richer than the US?

China is considered a richer country than the US when it comes to measuring purchasing power parity (PPP) but not in terms of nominal GDP or per capital income. PPP is a measure to adjust the difference in cost of living between countries. Learn how to interpret similar economic indicators when assessing an economy’s strength.

Is Germany the largest economy in Europe?

Germany has the largest economy in Europe, ahead of the UK, France and Italy. It relies on the export of manufactured goods, as well having strong financial and chemical sectors. Explore the German stock market to trade on blue-chip stocks such as SAP, Deutsche Bank, Volkswagen, Adidas and Merck.

What is the Australian economy known for?

Australia is by far the largest producer of lithium, a non-renewable mineral that is vital for the development of clean energy, such as lithium-ion batteries. Australian-based lithium mining stocks such as Allkem, Core Lithium and Pilbara Minerals are some of the world’s biggest producers of the commodity for usage in electronics, solar power storage and electric cars.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

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