The largest economies in the world

What are the top 10 biggest economies in the world? Find out with our complete guide to the economies by GDP, GDP per capita and PPP GDP.

• What is an economy?
• Measuring an economy’s size
• 10 biggest economies in the world

What is an economy?

An economy is a complex system that governs how goods and services are made and distributed in any given area. It dictates how people work, are paid and spend their money. Generally, economies can be market or command-based, although most are a mix of the two.

The area covered in this definition of economy can be anything. You can talk about the economy of a village, city, country or even planet (usually only Earth, for now anyway).

Below, we list the largest economies in the world by country. However, that doesn’t cover the whole picture. The Eurozone, for example, isn’t a country but many consider it one economic region – it shares a currency and a central bank, after all.

Measuring an economy’s size

The chief measure of the size of an economy is gross domestic product (GDP). This is an indicator that involves calculating all the goods and services produced, bought and sold within an economy within a set period – usually a quarter.

If GDP goes up, you have a growing economy. If it goes down, your economy is shrinking. If it goes down over a prolonged period, you have a recession.

However, there are some criticisms of GDP. For example, it doesn’t take factors like population size or the cost of living into account. Because of this, some prefer to combine GDP with other measures. GDP per capita, for example, divides GDP by the size of a country’s population.

By this measure, the biggest economies in the world are:

• Norway (GDP per capita of $106,149)
• Ireland (GDP per capita of $104,039)
• Switzerland (GDP per capita of $92,101)

Another issue with comparing countries by GDP is the complications of exchange rates. Each country’s GDP needs to be converted to the US dollar to make a fair comparison, but this means that the strength of the US dollar will affect GDP comparisons.

PPP-adjusted GDP is one method of counteracting this. It uses a purchasing power parity (PPP) exchange rate instead of the standard one, meaning countries where goods are cheaper will have higher figures overall.

By PPP GDP, the biggest economies are:

• China ($33 trillion PPP GDP)
• United States ($26.85 trillion PPP GDP)
• India ($13 trillion PPP GDP)

 

Below though, we’ve used GDP converted with standard rates, known as nominal GDP.

Biggest economies in the world by GDP

According to IMF data for 2023, the 10 largest economies in the world are:

1. United States (GDP $26.9 trillion)
2. China (GDP $19.4 trillion)
3. Japan (GDP $4.4 trillion)
4. Germany (GDP $4.3 trillion)
5. India (GDP $3.7 trillion)
6. United Kingdom (GDP $3.2 trillion)
7. France (GDP $2.9 trillion)
8. Italy (GDP $2.2 trillion)
9. Canada (GDP $2.1 trillion)
10. Brazil (GDP $2.1 trillion)

The largest economy in the world: the United States

Nominal GDP: $26.85 trillion	2023 growth: 1.6%
GDP per capita: $80,030	PPP GDP: $26.85 trillion

The largest economy in the world by GDP is the United States. It has been the dominant world power for multiple decades, and in 2022 accounted for over a quarter of the entire global economy.

The US economy is of course underpinned by its currency, the US dollar. This is the global reserve currency and by far the most traded currency in the world. The economy is managed in part by the Federal Reserve, which sets interest rates and manages inflation.

The United States also has the world’s biggest stock market, with both of the world’s biggest stock exchanges – the New York Stock Exchange and the Nasdaq.

US GDP grew 2.1% in 2022 and is projected to grow 1.6% in 2023. In terms of GDP per capita, the United States ranks seventh in the world.

The second-largest economy in the world: China

Nominal GDP: $19.4 trillion	2023 growth: 5.2%
GDP per capita: $13,720	PPP GDP: $33.01 trillion

China is the second-largest economy in the world, with a total GDP of $19.4 trillion according to the IMF. It is growing fast, too – ten years ago, it was worth just $9.62 trillion. If it continues to grow at that pace, it will overtake the US and become the world’s biggest economy at some point in the 2030s.

Much of China’s recent growth has arrived as it opens its economy to the world, moving away from collectivisation and towards a freer market. It is the world’s biggest exporter, with a massive manufacturing industry. However, it is in the midst of a possible economic slowdown, which could put its path to growth in jeopardy.

Of course, China also has a gigantic population – the biggest in the world. That puts its GDP per capita well below many other countries on this list, 79th in the world at $7,000 per capita.

China is predicted to grow its nominal GDP 5.2% in 2023, and 4.5% in 2024. When purchasing power parity is taken into account, China is the biggest economy in the world.

3. Japan

Nominal GDP: $4.4 trillion	2023 growth: 1.3%
GDP per capita: $35,390	PPP GDP: $6.46 trillion

The world’s third-biggest economy is Japan. However, such is the economic dominance of China and the United States – which together comprise around 44% of the world economy – that Japan is only slightly over a fifth of the size of China.

Japan’s economy isn’t growing at the rate of its bigger rivals, either. In fact, it is almost $1 trillion smaller in 2023 than it was ten years ago – although that is partly due to central bank policies that heavily weakened the dollar-yen exchange rate.

The Japanese economy is built on technological prowess, but the Bank of Japan has had to grapple with a deep deflationary crisis going back decades. Today, it is still facing numerous issues, including a lack of natural resources and an ageing population.

4. Germany

Nominal GDP: $4.3 trillion	2023 growth: -0.1%
GDP per capita: $51,380	PPP GDP: $5.55 trillion

Fourth on our list is Germany, the biggest economy in Europe and the main economic power within the Eurozone.

Like Japan, the German economy is largely highly skills based. The country is a major exporter of cars, chemicals and technology. However, like Japan again, it is facing headwinds from an ageing population and low fertility rates.

Germany’s economy is predicted to shrink in 2023, before returning to 1% growth next year.

5. India

Nominal GDP: $3.7 trillion	2023 growth: 5.9%
GDP per capita: $2,600	PPP GDP: $13.03 trillion

The fifth biggest economy in the world belongs to India, the second-most populous country on the planet after China.

India is another example of a fast-growth economy. Ten years ago, it would’ve placed tenth on our list with a nominal GDP of $1.85 trillion. By 2028, it is predicted to have the third-biggest global economy at $5.6 trillion.

By PPP, India already has the third-biggest economy. However, when population is taken into account it performs much worse – its GDP per capita of $2,600 places it behind Angola, Vanuatu and Côte d'Ivoire.

6. United Kingdom

Nominal GDP: $3.2 trillion	2023 growth: -0.3%
GDP per capita: $46,370	PPP GDP: $3.85 trillion

The second-biggest economy in Europe – and sixth overall – is the United Kingdom. Until recently it was fifth, but India’s rapid growth has seen it overtake the UK.

The UK economy is largely driven by its service industry, including its finance and business services. It has struggled to grow strongly since the 2008 crash, a picture that was made much more complex by the 2016 Brexit vote. The UK does most of its trade with continental Europe, and its economy has struggled as it navigates a tricky separation from the European Union.

UK GDP is forecast to fall 0.3% in 2023, the worst performance of any country on our list. In 2024, it is expected to return to 1% growth.

7. France

Nominal GDP: $2.9 trillion	2023 growth: 0.7%
GDP per capita: $44,410	PPP GDP: $3.87 trillion

Close behind the UK in terms of economic power is its long-standing rival France. Ten years ago, the French economy was bigger, but in the years since UK has slowly pulled ahead.

France’s economy is partly based on tourism – it gets the most visitors of any country. However, it also boasts a strong and diverse private sector. The government tends to get involved in the private sector much more in France than in the other countries covered here, which can drag on the economy.

8. Italy

Nominal GDP: $2.2 trillion	2023 growth: 0.7%
GDP per capita: $36,810	PPP GDP: $3.20 trillion

Next up we have another major European economy: Italy. It has the fourth-biggest economy in Europe, and the eighth globally.

The Italian economy is deeply fragmented, with the north of the country being fairly developed industrially while the south is much more rustic. That is just one issue facing the country, with high public debt, an underdeveloped banking sector and labour issues all dragging on growth.

However, it is still set to increase GDP 0.7% this year, and 0.8% the next.

9. Canada

Nominal GDP: $2.1 trillion	2023 growth: 1.5%
GDP per capita: $52,720	PPP GDP: $2.39 trillion

The United States’ northern neighbour Canada has the ninth-biggest economy in the world, just behind Italy’s. The IMF predicts that by 2026, Canada will be bigger.

Canada’s economy benefits from rich natural resources – it has large oil reserves and exports a large amount of energy (chiefly to the US). It also has a strong industry and a free trade agreement with the US.

That means that where the US economy goes, the Canadian one will typically follow.

10. Brazil

Nominal GDP: $2.1 trillion	2023 growth: 0.9%
GDP per capita: $9,670	PPP GDP: $4.02 trillion

Finally on our list, we have Brazil – another high-growth economy. Brazil, China and India are all part of the ‘BRICs’ group of fast-growing economies, alongside Russia (which has the 11th biggest economy in the world).

Brazil boasts a highly diversified economy, with a lot of industrial production and energy extraction. It is a large exporter of coffee beans, the second most-traded commodity after oil.