Top 10 Major Economies in the World at Present 2018

Top 10 Major Economies in the World at Present 2018. Thanks to globalization, every economy is in one way or another tied to another. In some cases, a small number of countries can turn the tide of the global markets with one great innovation or blunder.

Top 10 Major Economies in the World at Present 2018

Here we take a look at the ten biggest economies of the world, calculated using modified data from the IMF and World Bank to calculate a countries overall value. Economic measurements for credit worthiness and individual wealth were not included into rankings unless a tie occurred.

Top 10 Major Economies in the World at Present 2018

Top 10 Major Economies in the World at Present 2018

When it comes to the top 10 national economies around the globe, the order may shift a bit, but the key players usually remain the same, and so does the name at the head of the list. The United States has been the world’s biggest economy since 1871. But that top ranking is now under threat from China.

Top 10 Major Economies in the World at Present 2018

1. United States – Economic Value 19.42 trillion

Despite facing challenges at the domestic level along with a rapidly transforming global landscape, the U.S. economy is still the largest in the world with a nominal GDP forecast to exceed USD 20 trillion in 2018. The U.S. economy represents about 20% of total global output, and is still larger than that of China.

The U.S. economy features a highly-developed and technologically-advanced services sector, which accounts for about 80% of its output. The U.S. economy is dominated by services-oriented companies in areas such as technology, financial services, healthcare and retail. Large U.S. corporations also play a major role on the global stage, with more than a fifth of companies on the Fortune Global 500 coming from the United States.

The U.S. economy is projected to grow 2.4% in 2018 and 2.0% in 2019.

2. China – Economic Value 11.8 trillion

Everything is made in China, including substantial amounts of money. With the single largest manufacturing economy in the world, with accompanying largest agricultural and distribution sectors each employing nearly 300 million individuals, it’s easy to see why the economy is so large.

There is a slight contradiction in terms of economic well being of the country when compared to the majority of people, however. While in pure numerical output China is among the richest, when paired with Purchasing Power Parity it begins to become one of the poorest, mostly due to the low wage earnings of the millions of factory workers.

Current President Xi JinPing, to his credit, has laid out plans to try and tighten the gap between global and personal well being through economic plans. China is an interesting case for yet another reason: it is the only pure socialist market economy to make the list, and a vast majority of profits are made by the public sector, not private firms.

Top 10 Major Economies in the World at Present 2018

3. Japan – Economic value 5.42 trillion

Japan’s economy currently ranks third in terms of nominal GDP, while it slips to fourth spot when comparing the GDP by purchasing power parity. The economy has been facing hard times since 2008, when it first showed recessionary symptoms. Unconventional stimulus packages combined with subzero bond yields and weak currency have further strained the economy (for related reading, see: Japan’s Economy Continues to Challenge Abenomics). Economic growth is once again positive, to about 1% in 2016 and further to around 1.2% in 2017; however, it is forecasted to stay below 1% during the next five years. The nominal GDP of Japan is $4.84 trillion, its GDP (PPP) is $5.42 trillion, and its GDP (PPP) per capita is $42,860.

4. Germany – Economic Value 4.13 trillion

Germany is Europe’s largest and strongest economy. On the world scale, it now ranks as the fourth largest economy in terms of nominal GDP. Germany’s economy is known for its exports of machinery, vehicles, household equipment, and chemicals. Germany has a skilled labor force, but the economy is facing countless of challenges in the coming years ranging from Brexit to the refugee crisis (for related reading, see: 3 Economical Challenges Germany Faces in 2016). The size of its nominal GDP is $3.42 trillion, while its GDP in terms of purchasing power parity is $4.13 trillion. Germany’s GDP (PPP) per capita is $49,814, and the economy has moved at a moderate pace of 1-2% in recent years and is forecasted to stay that way.

5. United Kingdom – Economic Value 2.91 trillion

The United Kingdom, with a $2.5 trillion GDP, is currently the world’s fifth largest. Its GDP in terms of PPP is slightly higher at $2.91 trillion while its GDP (PPP) per capita is $44,001. The economy of the UK is primarily driven by services, as the sector contributes more than 75% of the GDP. With agriculture contributing a minimal 1%, manufacturing is the second most important contributor to GDP. Although agriculture is not a major contributor to GDP, 60% of the U.K.’s food needs is produced domestically, even though less than 2% of its labor force is employed in the sector.

After the referendum in June 2016 when voters decided to leave the European Union, economic prospects for the UK are highly uncertain, and the UK and France may swap places. The country will operate under EU regulations and trade agreements for two years after the formal announcement of an exit to the European Council, in which time officials will work on a new trade agreement. Economists have estimated that Brexit could result in a loss of anywhere from 2.2-9.5% of GDP long term, depending on the trade agreements replacing the current single market structure. The IMF, however, projects growth to stay between 1.5-1.9% in the next five years.

Top 10 Major Economies in the World at Present 2018

6. India – Economic Value 2.45 trillion

India is projected to overtake both the UK and French economies in 2018 to become the fifth largest economy in the world with a nominal GDP of USD 2.9 trillion.

From 2003 to 2007, India experienced high growth rates of around 9% annually before moderating in 2008 as a result of the global financial crisis. In the following years, India began to see growth slow due to a plunging rupee, a persistently high current account balance and slow industry growth. This was exacerbated by the U.S.’ decision to cut back on quantitative easing, as investors began to rapidly pull money out of India. However, the economy has since bounced back as the stock market has boomed and the current account deficit has decreased. India’s economy recently surpassed China’s to become the world’s fastest growing large economy. We forecast India’s growth at 7.4% FY 2018.

7. France – Economic Value 2.42 trillion

France’s economy will be the seventh largest in the world in 2018, representing around one-fifth of the Euro area gross domestic product (GDP) at USD 2.8 trillion. Currently, services are the main contributor to the country’s economy, with over 70% of GDP stemming from this sector. In manufacturing, France is one of the global leaders in the automotive, aerospace and railway sectors as well as in cosmetics and luxury goods. Furthermore, France has a highly educated labor force and the highest number of science graduates per thousand workers in Europe.

Compared to its peers, the French economy endured the economic crisis relatively well. Protected, in part, by low reliance on external trade and stable private consumption rates, France’s GDP only contracted in 2009. However, recovery has been rather slow and high unemployment rates, especially among youth, remain a growing concern for policymakers.

After a period of volatile growth readings in recent years, growth appears to be finally on a steady track, having expanded 0.5% on a quarter-on-quarter basis in Q3 2017. That marks the fourth consecutive quarter where quarter-on-quarter growth came in at or exceeded 0.5%.  FocusEconomics Consensus Forecast expect GDP to grow 1.8% in 2018 and 1.6% in 2019.

8. Brazil – Economic Value 2.14 trillion

With its $2.14 trillion economy, Brazil now ranks as the eight largest economy by nominal GDP. The Brazilian economy has developed services, manufacturing, and agricultural sectors, with each sector contributing around 68%, 26%, and 6% respectively. Brazil is one of the BRIC countries, and was projected to continue to be one of the fastest growing economies in the world. However, the recession in 2015 caused Brazil to go from seventh to ninth place in the world economies ranking, with a negative growth rate of 3.6% (2016). The IMF expects the economy to grow at 0.2% during 2017, further recovering to 1.7% in 2018 and then to 2% during the next four years. The Brazilian GDP measured in purchasing power parity is $3.22 trillion, while its GDP (PPP) per capita is $15,485.

Top 10 Major Economies in the World at Present 2018

9. Italy – Economic Value 1.81 trillion

Italy is the world’s ninth-largest economy, however, the country suffers from political instability, economic stagnation and lack of structural reforms, which are holding it back. Prior to the 2008 financial crisis, the country was already idling in low gear. In fact, Italy grew an average of 1.2% between 2001 and 2007. The global crisis had a deteriorating effect on the already fragile Italian economy. In 2009, the economy suffered a hefty 5.5% contraction—the strongest GDP drop in decades. In 2012 and 2013 the economy recorded contractions of 2.4% and 1.8% respectively, however, the economy has gradually improved in recent years. Nonetheless, it continues to be burdened by numerous long-standing structural problems, including a rigid labor market; stagnant productivity; high tax rates; a large, albeit declining, volume of non-performing loans in the banking sector; and high public debt. These weaknesses restrain the country’s growth potential, keeping its growth outlook below that of its European peers.

FocusEconomics panelists see nominal GDP coming in at USD 2.1 trillion in 2018, increasing 1.3% annually.

Top 10 Major Economies in the World at Present 2018

10. Canada – Economic Value 1.6 trillion

Last but not least we have Canada, the 10th largest economy in the world, just ahead of Russia. From 1999 to 2008, Canada posted strong economic growth and GDP expanded 2.9% annually on average. Due to its close economic ties to the United States, in the crisis-year 2009 Canada’s economy contracted 2.7% over the previous year. Canada did manage to recover quickly from the impact of the crisis, however, thanks to sound pre-crisis fiscal policy, a solid financial system, a relatively robust external sector and the economic strength of its resource-rich western provinces. Since 2010, growth has picked up again and between 2010 and 2013 Canada’s economy expanded 1.4% per year on average. After the end of the commodities super cycle, the Canadian economy took a hit, but it has slowly recovered in recent years, growing faster then all of the G7 countries in Q2 2017. FocusEconomics panelists expect GDP to come in at USD 1.8 trillion with am annual growth rate of 2.2% in 2018.

Top 10 Major Economies in the World at Present 2018

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