What does the phrase ‘the strongest economy in the world’ mean?

The ranking of the strongest economy in the world is determined by the classification of the Gross Domestic Product (GDP) of countries, which shows the largest and strongest economies in the world. 

Every year, United Nations organizations and the International Monetary Fund publish a report on the GDP of all countries in the world, and through this report, the countries with the strongest economies in the world are identified.

What are the global economic powers?

Just as there are major political powers and military powers, there are also major economic powers that control the global economy and its reins. 

These are the powers that occupy the top ranks of the world’s countries from an economic perspective.

Despite the severe fluctuations and successive crises affecting the global economy, we can see that the countries in the top ten ranking of the world’s strongest economies still maintain their positions. 

From this, we can conclude the extent of economic strength these countries possess and their ability to face economic fluctuations of various kinds.

In this article, we will present the ranking of countries in the world economically in 2022, as issued by the World Bank and the International Monetary Fund. But first, we will define the main criteria used to rank and determine the strongest economy in the world, including Gross Domestic Product and the difference between nominal GDP and GDP in terms of purchasing power parity.

What criteria determine the countries with the strongest economy in the world?

The primary criterion in ranking the strongest economy in the world is the Gross Domestic Product (GDP). GDP is defined as the total cash market value of goods and services produced within a country during a specified period. 

It helps provide a comprehensive picture of a country’s economic strength and can be calculated using expenditure, production, or income methods.

What is the value of the global Gross Domestic Product?

The global Gross Domestic Product is the sum of the GDPs of all the world’s countries combined and amounted to approximately $91.98 trillion in 2022.

It is calculated by adding up the Gross National Income of all countries and taking the Gross National Income from the GDP of the country, then adding the value of income from imports and subtracting the value of income from exports. It’s important to note that the global economy comprises 193 economies, with the United States having the largest economy.

According to estimates from the World Bank, the global Gross Domestic Product was around $80.6 trillion in 2017. It increased in 2018 to reach $84.8 trillion and continued to rise in the following year, 2019, reaching $88.01 trillion. By the end of 2020, it surpassed $91 trillion.

Ranking of countries with the strongest economy in the world:

1. United States

The United States remains the strongest economy in the world, occupying the top spot in terms of Gross Domestic Product, which the International Monetary Fund estimates at $25 trillion US dollars.

It’s worth noting that this GDP represents a quarter of the global Gross Domestic Product and is larger than the GDP of all African countries combined ten times over.

The population of the United States is approximately 328 million people, or roughly 4% of the world’s total population. However, this small percentage of the world’s population holds over 30% of the world’s total wealth.

The per capita GDP in the United States is $66,678. The United States also ranks second globally in terms of estimated natural resource value. 

The value of natural resources held by the United States was estimated at around $45 trillion in 2016.

There are many factors that have contributed to the United States having the strongest economy in the world. The United States is known for its business-friendly environment that fosters entrepreneurship, innovation, and economic growth. Population growth has also contributed to a diversified workforce.

The United States is one of the leading industrial nations globally, ranking second behind China. In addition to its economic strength, the United States has the world’s most powerful currency, the US dollar, which is the most widely used currency in global transactions.

2. China

China holds the second position in the world’s strongest economy after the United States, with a Gross Domestic Product of $19 trillion US dollars, representing a growth increase of approximately $3 trillion over the 2021 GDP.

It is expected that China is on track to become the world’s largest economy in the coming years, with some projections suggesting that its GDP could reach around $64 trillion by 2030, making it the world’s strongest economy.

This rapid growth can be attributed to several factors, including government industrial policies that promote domestic manufacturing, a large and relatively inexpensive labor force, and abundant natural resources.

China ranks first in terms of Gross Domestic Product based on purchasing power parity, with a value of $27.31 trillion. The per capita GDP in China is $10,710, which is lower due to its large population, estimated at around 1.5 billion people.

China holds a massive reserve of natural resources, estimated at around $23 trillion, with 90% of it being rare earth minerals and coal.

China initiated an ambitious economic reform program in 1978, which has been highly successful, raising the country’s economic growth rate from 6% to over 9%. The reform program specifically focused on developing rural areas, reducing prices, investing in workforce education, and industrial production. Another contributing factor to China’s remarkable economic success has been the development of the skills and efficiency of the Chinese workforce in both the public and private sectors.

3- Japan

Japan is considered the world’s third-largest economy, with a Gross Domestic Product (GDP) estimated at 4.9 trillion US dollars according to the International Monetary Fund. 

When measured by Purchasing Power Parity (PPP), its GDP reaches approximately 5.75 trillion US dollars. The per capita GDP in Japan stands at $43,597. 

The Japanese economy grows at a slow and relatively stable pace compared to other leading global economies, which could potentially impact its rankings in the near future. The global financial crisis in 2008 had a significant impact on Japan’s economic growth, and it has faced challenges since then. However, the 2021 Tokyo Olympics provided a strong boost to the Japanese economy.

Japan’s economic strength primarily lies in the electronics industry, where it holds a leading position globally, and the automobile industry, as it ranks as the third-largest car producer in the world.

The Japanese economy faces significant challenges, such as a declining population and birthrate, an aging population, but it is also driven by a strong work ethic and continuously rising debt since 2017, reaching approximately 236% of its GDP.

In contrast to the United States and China, Japan is resource-poor and heavily reliant on energy imports.

4- Germany

The German economy is the fourth-largest in the world, with a Gross Domestic Product (GDP) of 4.0 trillion dollars. When measured by Purchasing Power Parity (PPP), Germany’s GDP is approximately 4.44 trillion dollars. The per capita GDP in Germany is around $46,560, ranking it eighteenth globally.

The German social market economy is considered the strongest among European economies. Germany boasts one of the most skilled workforces in Europe and accounts for an estimated 28% of the European Union’s economy, according to the International Monetary Fund and the World Bank.

Key industries in Germany include automotive manufacturing, machinery and household equipment, and chemicals. The German economy suffered a significant setback following the global financial crisis in 2008, primarily due to its reliance on capital goods exports.

Germany is undergoing a significant transformation, embracing the internet and the digital age. It relies heavily on solutions and technologies, making widespread use of information technology with a high degree of digital systems across various industries.

5- India

India possesses the world’s fifth-largest economy, with a Gross Domestic Product (GDP) of approximately 2.94 trillion dollars, surpassing the GDPs of major European nations like the UK, France, and Italy. 

When measured by Purchasing Power Parity (PPP), India’s GDP reaches about 10.51 trillion dollars, surpassing both Japan and Germany.

Due to India’s large population of 1.4 billion people, the per capita GDP remains relatively low, not exceeding $2,170. India’s economy has witnessed remarkable growth in recent decades, thanks to its open-market policies and economic liberalization, which began in the 1990s. These measures included liberalizing industry, easing control on foreign trade and investment, and privatizing state-owned companies, contributing to accelerated economic growth.

The Indian service sector is the fastest-growing sector globally, comprising 60% of the economy and employing 28% of the workforce. Manufacturing and agriculture also hold prominent positions in the Indian economy. It is expected that India’s GDP growth will slow down to 5% by 2023, marking the third consecutive year of decline from the previous 7.5%.

6- United Kingdom

In 2022, the United Kingdom ranks as the sixth-largest economy in the world, with a Gross Domestic Product (GDP) of around 2.83 trillion dollars. It stands ninth globally in terms of GDP measured by Purchasing Power Parity (PPP) and twenty-third in per capita GDP, which amounts to $42,558.

Projections indicate that the UK’s economic ranking may drop to seventh globally in 2023 due to Brexit-related factors.

Since 2016, the United Kingdom has been the world’s tenth-largest exporter of goods, shipping goods to over 160 countries worldwide. This stems from the UK’s historical role as a leading manufacturing nation, beginning in the 18th century.

Like most European economies, the service sector dominates the UK economy, contributing to around 80% of the Gross Domestic Product (GDP), with a strong presence in financial services. London, the capital city, is the world’s second-largest financial center after New York.

Manufacturing and agriculture are the second and third-largest economic sectors in the UK after services. The UK ranks second globally in aviation and maritime industries and tenth in pharmaceuticals.

7- France

The French economy is considered the seventh strongest in the world and the third largest in Europe after Germany and the United Kingdom. France’s Gross Domestic Product (GDP) is approximately $2.78 trillion, and the GDP based on purchasing power parity is about $2.96 trillion. The per capita GDP in France is around $42,877, ranking it 19th globally.

According to data from the World Bank and the International Monetary Fund (IMF), France has experienced high unemployment rates in recent years, with an unemployment rate of around 10%.

The French economy is known for its diversity and is based on a free-market system. The chemical industry is the leading sector in France, followed by agriculture and tourism. France owns about a third of the total agricultural land in the European Union, making it the sixth-largest agricultural producer in the world and the second-largest exporter of agricultural products globally, after the United States.

France is also currently a top tourist destination worldwide. Additionally, it ranks fifth in the Fortune Global 500, an annual ranking of the world’s largest 500 companies by revenue, following the United States, China, Japan, and Germany. France alone has approximately 28 companies listed on this index.

8- Italy

The Italian economy ranks as the eighth strongest in the world in 2022, with a nominal GDP of around $1.99 trillion. In terms of GDP based on purchasing power parity, Italy’s economy is $2.40 trillion. The per capita GDP in Italy is approximately $34,260.

Italy is expected to experience significant economic growth by 2023, with a GDP of approximately $2.26 trillion. However, Italy has relatively high unemployment rates in recent years, reaching 9.7%, and its public debt has risen to 132% of GDP.

Italian exports play a significant role in its economic recovery, as Italy ranks eighth among exporting countries. About 59% of its exports are traded within the European Union.

Italy’s economy has evolved from being primarily agricultural before World War II to one of the most advanced in the world today. It is the second-largest contributor to the European Union, after Germany, and has a substantial trade surplus in machinery, vehicles, food products, clothing, and more.

9- Brazil

Brazil possesses the ninth strongest economy in the world and is the largest economy in Latin America. Its nominal GDP is $1.87 trillion, while its GDP based on purchasing power parity is approximately $2.40 trillion. Due to its large population of approximately 213 million people, Brazil ranks low in per capita GDP, with each person averaging $8,967.

Brazil also boasts vast natural resources estimated at around $21.8 trillion, including substantial reserves of timber, uranium, gold, and iron.

The Brazilian economy is one of the world’s largest and fastest-growing, based on a free-market system. However, it is also characterized by significant income inequality, and an economic crisis in 2017 resulted in a substantial increase in poverty rates.

Brazil is one of the world’s top ten trading nations and has a low level of income inequality.

10- Canada

Canada is ranked as the tenth strongest economy in the world in 2022, with a nominal GDP of $1.73 trillion. Its GDP based on purchasing power parity is $1.84 trillion, placing it 17th globally. Canada’s per capita GDP is approximately $46,260, ranking it 20th worldwide.

It is expected that Canada’s GDP will rise to approximately $2.13 trillion in 2023. Canada is also fourth globally in terms of the estimated value of its natural resources, with assets valued at about $33.2 trillion, primarily in petroleum, coal, and natural gas.

Canada is a major player in the energy sector, with abundant natural resources. It is considered one of the least corrupt countries in the world, according to the Corruption Perceptions Index, and is among the top ten trading nations globally. Canada also has low income inequality.

11- Turkey

Turkey is among the world’s leading economies, one of the major industrialized countries, and has a robust and cohesive economic infrastructure. In recent years, Turkey has demonstrated significant economic strength and resilience in various economic fields.

According to the International Monetary Fund (IMF), Turkey’s economic ranking improved from 13th place in 2020 to 11th place in 2021, among the world’s strongest economies, demonstrating notable progress and prosperity.

As of December 2021, the estimated Gross Domestic Product (GDP) in Turkey was approximately $815 billion, with expectations of further growth in 2022. According to the IMF, Turkey ranks 19th globally in terms of nominal GDP and 13th in terms of GDP based on purchasing power parity, placing it among the world’s major economies.

In 2022, the Turkish economy achieved a growth rate of 7.3%. The rate of increase in gross production reached 79.5% in the first quarter of the year. This growth was driven by manufacturing in various sectors, an increase in exports, and a reduced dependence on imports.

According to the IMF’s classification of countries by GDP, Turkey’s economy currently ranks 23rd globally, with expectations of entering the top ten economic countries in the coming years.