Did you know that while the United States of America is the largest economy in the world in terms of nominal GDP, it is China which takes the number spot when ranked in terms of PPP?

The Top 10 Largest Economies in the World in 2023 are ranked as the largest economies based on their nominal GDP, a metric that accounts for current market value of a country’s output. On the other hand, GDP based on purchasing power parity, or PPP, measures the value of goods and services produced in a country with respect to another country’s currency – usually the US Dollar. The GDP based on PPP metric is widely used to gauge differences of economic productivity that exist between countries.

The United Nations has projected the world economy to grow by 2.3% in 2023. The United States economy, which is the largest economy in the world in terms of nominal GDP, is expected to grow 1.1% this year, in contrast to China, which takes the number spot when ranked in terms of PPP’s GDP, is projected to expand by over 5%. Hopes of Europe’s economic recovery from the effects of the coronavirus pandemic remain dim amid Russia’s invasion of Ukraine. European economies, on average, are forecasted to grow by a mere 0.9% this year.

Economic experts have dubbed the 21st century as Asia’s century. According to forecasts made by PricewaterhouseCoopers International Limited (PwC), the global GDP will grow 130% between 2016 and 2050. China alone will hold one-fifth of the share of the world’s GDP in terms of PPP by 2050, while India is tipped to surpass the United States to rank 2nd....

Here are the 10 largest economies in the world ranked by PPP. We have used GDP based on PPP for countries to rank the largest economies in the world. The figures are from 2022 and were sourced from the International Monetary Fund (IMF):

1. CHINA | GDP (PPP): $30.21 trillion

China is the largest economy in the world ranked by PPP. In 2022, the IMF measured the size of the Chinese economy to be above $30 trillion. China’s rise over the last three decades has been a remarkable story. The country poses a direct challenge to the global political and economic hegemony of the United States. China’s GDP is expected to expand by a further 5.3% in 2023.

2. UNITED STATES | GDP (PPP): $25.47 trillion

The United States is the largest economy in the world in terms of nominal GDP, but ranks below China when it comes to PPP. Despite that, currently the U.S. dominates the global economic order and remains the most influential power in the world. The U.S. Dollar is the most powerful currency in the world, accounting for nearly 85% of all daily forex trade. In addition to this, 59% of all foreign reserves in central banks across the world are maintained in the greenback.

3. INDIA | GDP (PPP): $11.86 trillion

India is the third largest economy in the world in purchasing power parity. It is also the strongest country in South Asia, and is competing with China on supremacy over the Asian continent. In 2022, the IMF estimated the PPP size of the Indian economy to be $11.86 trillion. However, despite being an economic powerhouse, India ranks low on GDP per capita, with millions of its citizens living in abject poverty.

4. JAPAN | GDP (PPP): $6.14 trillion

Japan is the second largest economy in Asia. It ranks as the third largest in the world in terms of nominal GDP, while fourth based on purchasing power parity (PPP). Automobiles and electronics equipment are the major exports of the country. Japan’s GDP has grown 2.7% in the first quarter of 2023.

5. GERMANY | GDP (PPP): $5.35 trillion

Germany is Europe’s strongest economy, and the fifth largest economy in the world. Much of the $5.35 trillion output in PPP terms in 2022 was contributed by the services sector. Germany’s GDP is expected to grow 0.4% in 2023.

6. RUSSIA | GDP (PPP): $4.77 trillion

Russia is the sixth largest economy in the world, boasting a GDP in PPP terms of $4.77 trillion. Due to its huge oil and natural gas reserves, Russia remains a major economic force, and will retain this status even in the coming decades according to economic projections.

7. INDONESIA | GDP (PPP): $4.04 trillion

Indonesia is one of the top emerging economies, and is the largest economy in Southeast Asia. In 2022, the IMF estimated the size of the economy at over $4 trillion in PPP terms. Indonesia is projected by PwC to be the fourth largest economy in the world by 2050.

8. BRAZIL | GDP (PPP): $3.84 trillion

Brazil had a GDP based on PPP of $3.84 trillion in 2022. The economy is poised for further growth in the coming years. PwC has projected Brazil to be the fifth largest economy in the world by 2050.

9. UNITED KINGDOM | GDP (PPP): $3.71 trillion

The United Kingdom is Europe’s second largest economy. In 2022, the country’s GDP was estimated to be $3.71 trillion. Currently, the UK is going through its worst energy and cost of living crisis. The ongoing political turmoil which has seen three prime ministers hold office since 2022 is not helping provide public and investor confidence which are vital ingredients to stabilize the economy.

10. FRANCE | GDP (PPP): $3.70 trillion

France had a GDP growth of 2.6% in 2022. The size of its economy in PPP terms was measured at $3.70 trillion. This year the economy is likely to slow down and be subdued to a rise in energy prices.

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