It is interesting to note that although there are shifts in the best performing economies from time to time, overall they tend to remain the same. You could say that the ‘usual suspects’ are always at the head of the list, but there are undoubtedly some threats to the Big Daddy of world economies, and I am referring to the USA.
The United States of America
It is still No.1 in terms of nominal GDP. In fact it accounts for 25% of the world’s gross product. It takes this spot thanks to its advanced technology, infrastructure and natural resources and it only beats China due to the fact that its GDP per capita is higher. GDP per capita for the US economy is approximately $59,609 versus $16,676 in China.
With a GDP of $23.19 trillion it should be in No.1 position. It has transformed itself from a closed economy into a manufacturing and exporting hub. This started back in 1978 and since then it has achieved on average, an annual economic growth of 10%. It has lifted almost 1.3 billion people out of poverty and it is estimated that it will pull into the top spot over the next few years.
The Land of the Rising Sun is still a world economic leader with a GDP of $4.8 trillion, although it has been going through some challenging times since 2008 when it showed symptoms of a recession. Further strains have been put on the economy by a weak currency and subzero bonds, but growth of 1.2% is predicted for 2017 and it is likely to stay at around 1% for the next five years.
Germany remains Europe’s largest economy and forth in the world in terms of GDP. Its strength lies in exports of machinery, automobiles, chemicals and household equipment, plus it has a skilled labour force. It does face some challenges, including the UK’s Brexit and a refugee crisis. However, it is predicted that it will maintain stable growth at about 1%-2%.
The UK is in fifth place with a GDP of $2.5 trillion. It is driven by service industries, particularly in the financial sector, which accounts for 75% of GDP. Manufacturing and agriculture are small, but important contributors. However, its current position is threatened by the decision to leave the EU and economist predicts that it could result in anywhere between a 2.2% to a 9.5% loss in GDP. So, its future in the league table is uncertain.
India has a GDP of $2.45 trillion. Its large population lowers its GDP per capita and it is very dependent on agriculture compared with Western countries. However, the services sector now accounts for 57% of the GDP, while industry contributes 26%. The economy’s strength lies in a limited dependence on exports, high saving rates, favourable demographics and a rising middle class. It is now a faster growing economy than China and is expected to rise to fourth place by 2022.
The Top 6 are followed by France, Brazil, Italy and Canada. It will be interesting to watch what happens. Predictions say the leader list will look much the same in 2022 as it does now – let’s see,