In the globalised era, the economies of the world remain interconnected creating one giant world GDP. Analysing this world GDP is an imperative task for assessing one’s own position in the world economy as well as for taking key decisions in the international affairs. Around 90% of the world economy which is around $103 trillion comes from 19 countries which includes our country also.
Analysing the economies and their proportions in the world economy tells us how much the United States dominates, contributing close to 25% of the world economy. Such a polarising power on the world economy is also because of the States’ dominant political power in the global arena. The nominal GDP of this country as estimated to be at around $25 trillion. It is more than seven times our own economy. Such a wide economical gap affects the politics between countries. More than two-thirds of the economy comes from personal consumption expenditure (PCE). This is the result of an upper income population which is amply shown by its per-capita income of $76,000, the highest in the world.
Our neighbour China occupies the second position in the list with a GDP of almost $20 trillion. China is the perfect example for a state which was able to put a population bigger than India in the range of upper middle income. Boasting a very large manufacturing sector, China constantly works on improving itself and has already been working on the “Made in China 2025” initiative which was launched in 2015. According to statistical data and government plans, around $9 trillion could be added to China’s economy in the next five years, making it surpass the United States in the global economic arena.
Japan is a perfect example of a small country being able to outweigh the economies of countries more than twenty times its size, such as Russia and Australia. It has a GDP size of $4.91 trillion. Japan ranks the top amongst global innovation hubs. It spends a massive 4% of its GDP on Research and Development. Before Abe Shinzo came to power Japan suffered two decades of deflation. The popularly known ‘Abenomics’ were a set of economic guidelines directing a policy package aimed at undoing the economic crisis of the country. Japan has a high per capita GDP at about $39,243.
The largest economy of Europe is Germany and it is also the fourth largest economy of the world. The ‘Made in Germany’ tag carries with itself a promise of excellent craftsmanship which speaks heaps and bounds about the robust manufacturing sector, especially the automobile industry. This developed country boasts a lot of the industrial robots utilized across its modernized industries which also makes it the fifth largest robot market in the world.
The United Kingdom has projected a GDP of $3.38 trillion in 2022. It is mainly a service driven sector with the service industry accounting for 80% of the economy. Though it is supposed to come down a spot in the trillion dollar economies by 2025, its per capita income is set to increase even further.
Such a twist of fate is that the country that served more than three centuries to the one mentioned above providing it with immense wealth and resources will finally outshine its previous hegemon in terms of size of economy. This country is none other than our own India. India is supposed to climb to the fifth rank in the trillion dollar economies owing to the fact that it is the fastest growing economy. However, India’s per capita income is much lower than the other countries on this list. With a per capita income of just $2,342, India is classified as a ‘lower middle income’ economy by the World Bank.
Discuss more of such topics at the Business Management College at Amrapali Institute, Haldwani. Amrapali Educational Institute is a top ranked institute in Uttarakhand.