If the world economy were a pie, the size of each slice would correspond to the percentage of the global GDP that each nation contributes. The United States, China, Japan, Germany, and India currently hold the most significant portions of the pie, accounting for more than half of the world’s GDP.
The success of the United States is a result of various reasons. Decentralised government, top-tier research institutions, and enabling legal frameworks also play a role. The US will consistently rank among the top nations worldwide in terms of GDP. It certainly helps to work in an environment that values effort and long hours.
China the second-largest economy in the world, with a 9.52% average annual growth between 1989 and 2019. With a nominal GDP of $14.14 trillion and a GDP of $27.31 trillion, China has the second-largest economy worldwide. 90% of China’s natural resources, which total $23 trillion, are coal and rare earth metals. The reform programme strongly emphasised the establishment of rural and private companies, the relaxing of state pricing controls, and investments in industrial output and workforce education. Worker effectiveness is another factor fueling China’s economy’s expansion.
The nation’s highly educated and talented workforce contributes significantly to growth. With a $5.15 trillion GDP, Japan has the third-largest economy in the world. Since the market drives the Japan economy, enterprises, production, and prices change in response to customer demand rather than governmental intervention.
The Japanese economy will likely confront some significant obstacles in the future, including a dwindling population and a debt that, as of 2017, was 236% of its GDP. It is anticipated that the 2020 Olympics will stimulate the Japanese economy, which has lagged since the financial crisis of 2008 and has taken damage. The largest electronic products sector in the world and the third-largest automobile industry are the backbones of the Japanese economy.
With a $4.0 trillion GDP, Germany has the fourth-largest economy in the world. Germany ranks 18th in the world per capita GDP with a $4.44 trillion GDP (PPP) per capita GDP of $46,560. Europe’s largest and most powerful economy, with one of the most highly skilled labour groups, is Germany’s highly developed social market economy. The International Monetary Fund estimates that Germany contributed 28% to the euro area’s economy.
The primary industries in Germany are the production of automobiles, machinery, home furnishings, and chemicals. Due to the Internet and the digital age, the German economy is currently in the midst of its fourth industrial revolution.
With a GDP of $2.94 trillion, India’s economy is the fifth-largest in the world, surpassing the economies of the UK and France in 2019. India’s GDP (PPP) is $10.51 trillion, more than Japan’s and Germany’s combined GDP. India has a large population, which results in a $2,170 GDP per capita (the United States has a GDP per capita of $62,794). Nonetheless, India’s real GDP growth is expected to slow from 7.5% to 5% in the third year.
India is transitioning from its past autarkic policies to an open-market economy. Early in the 1990s, India started to liberalise its economy, including privatising state-owned companies and reducing restrictions on foreign investment and trade. These actions have sped up India’s economic expansion.
Five countries will make up more than half of the world’s GDP in 2022, the U.S., China, Japan, India, and Germany. Interestingly, India replaced the UK this year as a top-five economy. Adding another five countries makeup 66% of the global economy, and the top 25 countries comprise 84% of the global GDP.