Since the dawn of the Millennium, countries of the world have risen from mega to super mega in terms of their economic growth. In this article, we will reveal the countries of the world with the fastest growing economy. The Gross domestic product of a country is usually the measure of the size of its economy. The most conventional economic Calculation of a country relies heavily on economic indicators like the GDP and GDP per capita. While often useful, GDP only includes economic activity for which money is used.
1.The United States of America
The U.S. economy is still the largest in the world with a nominal GDP forecast to exceed USD 20 trillion in 2018. The U.S. economy represents about 20% of total global output and is still larger than that of China. The U.S. economy features a highly-developed and technologically-advanced services sector, which accounts for about 80% of its output. The U.S. economic growth is dominated by services-oriented companies in areas such as technology, financial services, healthcare, and retail. Large U.S. corporations also play a major role on the global stage, with more than a fifth of companies on the Fortune Global 500 coming from the United States. The U.S. economy is projected to grow 2.4% in 2018 and 2.0% in 2019.
The Chinese economy is undoubtedly the second largest after the united state experiencing astonishing growth in the last few decades that catapulted the country. When China started the program of economic growth reforms in 1978 the country ranked ninth in the nominal gross domestic product (GDP) with USD 214 billion; 35 years after China jumped up to second place with a nominal GDP of USD 9.2 trillion. Since the introduction of the economic reforms in 1978, China has become the world manufacturing hub, where the secondary sector includes industry and construction represented the largest share of GDP. However, in recent years, China’s modernization propelled the tertiary sector, and in 2013, it became the largest category of GDP with a share of 46.1%, while the secondary sector still accounted for a sizeable 45.0% of the country’s total output. Meanwhile, the primary sectors weight in GDP has shrunk dramatically since the country opened to the world. The economy is projected to grow 6.4% in 2018, which is nothing to sniff at but is a far cry from the over 10% annual growth seen no too long ago.
The Japanese economic growth currently ranks third in terms of nominal GDP forecast to come in at USD 5.0 trillion in 2018. During the 1990s, also termed the Lost Decade, growth slowed significantly, largely due to the burst of the Japanese asset price bubble. In response, authorities ran massive budget deficits to finance large public works projects; however, this did not seem to get the economy out of its rut. A number of structural reforms were then enacted by the Japanese government designed to reduce speculative excesses from financial markets, however, this led the economy into deflation on numerous occasions between 1999 and 2004.The next measure taken was Quantitative Easing, which saw interest rates go zero and an expansion of the money supply to raise inflation expectations. Economic growth will once again be positive in 2018; however, it is forecasted to stay at or below 1% from 2019-2022. For 2018 we project 1.2% percent growth and 1.0% for 2019.
Germanys GDP grew 1.6% on average per year before the great recession, from 1999 to 2008. Owing to Germanys dependence on capital goods exports, the German economy plummeted 5.2% in 2009, as companies around the world scaled back their investment projects in the wake of the financial crisis. The year after, Germany’s economic growth bounced back with a strong 4.0% expansion. The next years were overshadowed by the persistent Euro-zone crisis, which dented demand in Europes southern countries. As a result, Germany’s economy grew at a lackluster pace annually between 2011 and 2013. The economy has since bounced back, as has the Euro-zone economy, and itll keep its spot at 4th on the list of largest economies with a nominal GDP of USD 4.0 trillion according to our forecasts for 2018. Analysts say Germany’s economic growth can reach 2.0% in 2018, coming in just below 2017s forecast of 2.1%.
India according to analysts is projected to overtake both the UK and French economies in 2018 to become the fifth largest economy in the world with a nominal GDP of USD 2.9 trillion. India experienced high economic growth rates of around 9% from 2003 to 2007, annually before moderating in 2008 as a result of the global financial crisis. In the following years, India began to grow slowly due to the downfall of the rupee, a persistently high current account balance and slow industry growth. This was worsened by the United States decision to reduce on quantitative easing, as India began to lose investors. However, the economy has regained vitality as the stock market has improved and the current account deficit has decreased. Indias economy recently surpassed China’s to become the worlds fastest growing large economy. Indias growth rate is forecasted at 7.4% FY 2018.
6.The United Kingdom
In the 10 years before the Great Recession, from 1999 to 2008, the UKs gross domestic product grew 2.8% on average per year. As a consequence of overinvestment in the housing market and consumers strong dependence on credit, the economy was hit very hard by the financial crisis and the credit crunch. In 2009, GDP fell 5.2%, mainly due to plummeting private fixed investment. However, GDP rebounded in 2010 with a 1.7% expansion. In the three subsequent years, however, growth did not post figures as strong as those before the crisis; average GDP growth was 1.0% in the 20112013 period. Since then growth has largely bounced back, however, Brexit negotiations between the UK and the EU are yet to be finalized and there is precious little time left to get it done. Growth is likely to slow this year, as private consumption growth dips and fixed investment is dampened by pervasive uncertainty generated by Brexit. However, a stronger external sector and resilient global demand should cushion the slowdown. The UK could fall out of the top 5 on the list of largest economies in 2018, with a nominal GDP of USD 2.8 trillion. Estimated GDP growth of 1.3% in 2018 and 1.4% in 2019.
Frances economy will be the seventh largest in the world in 2018, representing around one-fifth of the Euro area gross domestic product (GDP) at USD 2.8 trillion. Currently, services are the main contributor to the countrys economy, with over 70% of GDP stemming from this sector. In manufacturing, France is one of the global leaders in the automotive, aerospace and railway sectors as well as in cosmetics and luxury goods. Compared to other countries the French economy has endured economic crisis relatively well. Protected, in part, by low reliance on external trade and stable private consumption rates, Frances GDP only contracted in 2009. After a period of serious growth readings in recent years, growth appears to be finally on a steady track, having expanded 0.5% on a quarter-on-quarter basis in Q3 2017. That marks the fourth consecutive quarter where quarter-on-quarter growth came in at or exceeded 0.5%. France GDP is expected to grow 1.8% in 2018 and 1.6% in 2019.
Brazil’s GDP grew 3.4% on average per year from 1999 to 2008. This growth was driven, in part, by global demand for Brazilian commodities. After experiencing formidable growth in 2007 and 2008, Brazil’s economy shrank 0.3% in 2009 as demand for Brazil’s commodity-based exports fell and foreign credit waned. However, Brazil rebounded strongly the following year, growing 7.5%-the highest growth rate Brazil had experienced in 25 years. Since then, growth has slowed-partially due to rising inflation and Brazil’s economy grew an average of 2.1% annually from 2011 to 2013. Ever since then a combination of the ending of the commodities supercycle, tight credit conditions and political turmoil due to various corruption scandals have kept Brazil’s economy down. more so, Brazil keeps its spot in the top 10 with the economy has turned a corner early in 2017 and is expected to grow 2.4% in 2018 after contracting by over 3.0% in both 2015 and 2016. Brazil is forecast to have a nominal GDP of USD 2.1 trillion in 2018.
Italy is the worlds ninth-largest economy; although suffers political instability, economic stagnation and lack of structural reforms. Before the 2008 financial crisis, the country was already idling in low gear. In fact, Italy grew an average of 1.2% between 2001 and 2007. The global crisis had a deteriorating effect on the already fragile Italian economy. In 2009, Italy economy suffered a mighty 5.5% contractionthe strongest GDP drop in years. In 2012 and 2013 the economy recorded contractions of 2.4% and 1.8% respectively; however, the economy has gradually improved in recent years. Nonetheless, it continues to be burdened by numerous long-standing structural problems, including a rigid labor market; stagnant productivity; high tax rates; a large, albeit declining, the volume of non-performing loans in the banking sector; and high public debt. Italian nominal GDP is expected to come in at USD 2.1 trillion in 2018, increasing 1.3% annually.
Canada, the 10th largest economy in the world, Canada posted strong economic growth and GDP expanded 2.9% annually on average from 1999 to 2008. Due to its close economic ties to the United States, in the crisis-year 2009, Canadas economy contracted 2.7% over the previous year. Canada did manage to recover fast from the crisis, however, the sound pre-crisis fiscal policy was a major factor, a solid financial system, a relatively robust external sector and the economic strength of its resource-rich western provinces. Since 2010, growth has picked up again and between 2010 and 2013 Canadas economy expanded 1.4% per year on average. After the end of the commodities supercycle, the Canadian economy was shacked, but it has slowly recovered in recent years, growing faster than all of the G7 countries in Q2 2017. Canadian GDP is forecasted to come in at USD 1.8 trillion with an annual growth rate of 2.2% in 2018.