In this article, we will take a look at 22 of the biggest economies in the world in 2022. If you want to see more of the biggest economies of the world, go directly to 5 Biggest Economies in the World in 2022.
A country's economy relates to how goods and services are produced and consumed in a country. When an economy is growing, the amount of goods and services is generally increasing. When an economy is slowing, the growth of the amount of goods and services produced could be slowing or even contracting.
History of the World's Largest Economies
In terms of 2022's largest economies, many of the world's economies are located in the West given that the West developed first. With the industrial revolution having begun in Britain and then followed by countries in Europe, the British and some European countries developed first.
Later, when the British immigrated to the United States, they brought with them valuable know-how that helped the United States also modernize. Given United States' substantial resources, the country became a leading economic power in the early 1900's. Given that the country was the only one that was pretty much left untouched during World War II, the United States' economy became the dominant economy globally.
In recent decades, countries like China have grown in terms of GDP as they have modernized. For many years, China was one of the fastest growing economies in the world and as a result of the growth, China is now the second largest economy in terms of GDP.
In the future, economies in India and other emerging markets will likely increase substantially in terms of size.
Modern Day Economies
Modern day economies use currencies backed by central banks rather than backed by gold. The largest economies of today are also much more connected in terms of trade with other nations. McKinsey & Company notes,
Globalization is a long-term phenomenon: exports of goods as a share of global GDP doubled from 4 percent in 1945 to 9 percent in 1970 and doubled again in the 1980s. By 2017, the cross-border trade in goods and services had reached 28 percent of global GDP. In addition, the continued emergence of China, India, and other economies, plus the rise of seamless communications, in the form of the mobile phone and the internet, have quickened the pace and deepened the effects of globalization. On the whole, this has been a very good thing: the spread of globalization has helped lift billions of people out of poverty.
Many of the largest economies are also very innovative and more service orientated.
Due to high inflation, the U.S. Federal Reserve has increased interest rates five times in 2022 alone and many analysts believe the U.S. central bank will raise rates further this year.
Given the headwinds, economic growth could slow in the United States and potentially globally as well in the near term.
For our list, we used nominal GDP in 2021 according to the World Bank and assumed that the biggest economies of the world in 2022 will be similar to the biggest economies in the world in 2021.
The size of some economies on this list may be different in terms of purchasing power parity. For countries like China or India, for example, the economies of both nations are bigger in terms of purchasing power parity because the U.S. dollar can go further in those countries than in the United States.
22 Biggest Economies in the World in 2022
2021 GDP: $627.44 billion
Sweden has an advanced economy given its 2021 GDP of $627.44 billion and population of only 10.42 million. In 2019, The World Economic Forum further described the Nordic country, "Sweden, Denmark and Finland have not only become among the world’s most technologically advanced, innovative and dynamic economies in the world, but are also providing better living conditions and better social protection, are more cohesive, and more sustainable than their peers at a similar level of competitiveness."
2021 GDP: $674.05 billion
Poland has one of the largest economies in Eastern Europe with a 2021 GDP of $674.05 billion thanks to economic growth. The World Bank adds, "Poland’s well-diversified economy has proven to be one of the most resilient economies in the EU, recovering strongly in 2021 after a relatively small contraction in GDP of 2.2 percent in 2020. A sound macroeconomic framework, effective absorption of EU investment funds, a sound financial sector, better access to long-term credit, and access to European labor markets have supported long-term inclusive growth and poverty reduction."
2021 GDP: $812.87 billion
Switzerland has one of the richest countries in the world on an individual basis given the country's GDP per capita of $93,457.44 in 2021. Given the country's aggregate GDP of $812.87 billion for the year, Switzerland also has the world's 20th largest economy.
2021 GDP: $815.27 billion
Given its population of 84.1 million and its GDP per capita of $9,626.1 in 2021, Turkey has substantial economy growth potential. Like other nations, however, Turkey is facing inflation headwinds that could slow economic growth in the near term. In 2021, the country had a GDP of $815.27 billion.
18. Saudi Arabia
2021 GDP: $833.54 billion
Saudi Arabia has one of the largest economies in the Middle East with a 2021 GDP of $833.54 billion. While the country has benefited from the increase in oil prices from 2021, Saudi Arabia has begun to diversify the economy from hydrocarbons given its Vision 2030 initiative.
2021 GDP: $1.02 trillion
The Netherlands has one of the most advanced economies in Europe with GDP per capita and productivity on par with the OECD's best performers. Inequality is also lower in the Netherlands than in most advanced economies. In 2021, the Netherlands had a GDP of $1.02 trillion, ranking it #17 on our list of 22 Biggest Economies in the World in 2022.
2021 GDP: $1.19 trillion
Indonesia has one of the largest economies in Asia with a nominal GDP of $1.19 trillion and GDP, PPP of $3.57 trillion in 2021. Given its population of over 276 million, Indonesia likely has considerable more economic growth in the next few decades. If the country achieves its growth potential in the next few decades, Indonesia will rank substantially higher on this list in terms of nominal GDP.
2021 GDP: $1.29 trillion
With substantial resources, a population of around 130 million, and close proximity to the United States, Mexico has substantial growth potential in the future. Given its GDP of $1.29 trillion, Mexico is economy is the second largest in Latin America.
2021 GDP: $1.43 trillion
Spain has one of the largest economies in Europe given its 2021 GDP of $1.43 trillion. Despite the headwinds internationally, Spain's economy is expanding fairly rapidly relative to other developed nations. Spain's government expects its GDP to grow 4.4% in 2022 before slowing to 2.1% in 2023.
2021 GDP: $1.54 trillion
Australia has one of the highest GDP per capita in Asia with GDP per capita of almost $60,000 in 2021. The country also has a 2021 GDP of $1.54 trillion. In terms of individual sectors, health & education accounted for 13.2% of economic output while mining accounted for 11.5%. Exports to China and Japan have helped boost the economy as well. Australia's government writes on why the country is well positioned for growth in the future,
Two other factors underpin our resilience: location and diversity. Fast-growing Asia is set to deliver 44% of global GDP by 2026. Australian trade is already oriented towards Asia’s economies – especially in minerals, energy, services and agriculture. Also, our diverse and highly productive economy is resilient against economic shocks, including the ongoing pandemic.
2021 GDP: $1.61 trillion
Brazil has a GDP of $1.61 trillion and GDP, PPP of $3.4 trillion as of 2021. With its substantial land, resources, and population of 214 million, Brazil has substantial growth potential in the future. Given fairly high interest rates, economists estimate Brazil's economy could expand by 2.39% in 2022 and 0.5% in 2023.
2021 GDP: $1.78 trillion
Given its substantial land and resources, Russia has the 11th largest economy in the world with a 2021 nominal GDP of $1.78 trillion. The country also has the sixth largest economy in the world by purchasing power parity with a 2021 GDP, PPP of $4.79 trillion in 2021. With the Western sanctions due to the Ukraine Russia war in 2022, however, Russia's economy is facing headwinds.
10. South Korea
2021 GDP: $1.8 trillion
Thanks to a well educated workforce, a strong export sector, and a high tech economy, South Korea has one of the most advanced economies in all of Asia. Although it is a relatively small country, South Korea has one of the largest economies in Asia given its 2021 GDP of $1.8 trillion, ranking it #10 on our list of 22 Biggest Economies in the World in 2022.
2021 GDP: $1.99 trillion
Given its substantial land, resources, and proximity to the United States, Canada has one of the world's largest economies in the world with a GDP of $1.99 trillion. While it has historically had a natural resources driven economy, Canada's economy is now dominated by its service sector.
2021 GDP: $2.1 trillion
Italy has the eighth largest economy in the world with a 2021 GDP of $2.1 trillion. Although inflation rose to 12.8% in October, Italy's government expects GDP to rise 3.3% in 2022 and 0.6% in 2023. In the long term, Italy has growth potential given productivity advances.
2021 GDP: $2.94 trillion
France has one of Europe's largest economies given its 2021 GDP of $2.94 trillion, ranking it #7 on our list of 22 Biggest Economies in the World in 2022. Despite headwinds, France also expects its GDP to increase 2.7% this year and 1% in 2023.
2021 GDP: $3.17 trillion
While India has the world's sixth largest economy by nominal GDP at $3.17 trillion, the country has the world's third largest economy in terms of GDP, PPP at $10.2 trillion. With 1.4 billion people and a young population, India has substantial economic growth potential in the future. According to McKinsey & Company in October 2022, "India is poised to become a powerful economic growth engine: it has one of the fastest-growing economies in the world, the third-largest start-up ecosystem, and tech services, digital, and manufacturing sectors on track to become global powerhouses."
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Disclosure: None. 22 Biggest Economies in the World in 2022 is originally published on Insider Monkey.