The World's Top 5 Largest Economies in 2023
We are currently witnessing the changing of the economic guard, with emerging-market economies—particularly in Asia—making huge development strides and the hegemony of the West looking ever shakier. With the help of our panelists, we examine how this phenomenon will play out in the coming years.
1. United States: USD 24.9 trillion in 2023
FocusEconomics panelists see the U.S. retaining its title as the world’s largest economy, with a forecast for nominal GDP of USD 24.9 trillion in 2023. Nevertheless, the U.S. will still shed relative economic clout; while in 2000, the U.S. economy was around four times the combined size of the BRIC economies (Brazil, Russia, India and China), the BRICs will be over 10% larger than the U.S. in 2023.
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2. China: USD19.5 trillion in 2023
China will be hot on the heels of the U.S. in second place. Our panelists forecast Chinese GDP at USD 19.5 trillion, or roughly 80% of U.S. GDP. In 2018, the corresponding figure was around 65%. Although the U.S.-China trade war will continue to drag on Chinese economic momentum going forward, growth will still be robust, supported by private consumption and fixed investment.
3. Japan: USD 5.7 trillion in 2023
Japan will remain the world’s third largest economy, with nominal GDP of 5.7 trillion (2018: USD 5.0 trillion); however, it will have lost further ground to both developed and emerging-market rivals as a shrinking population feeds through to anemic economic growth—although the recent announcement of fiscal stimulus could provide some support.
4. Germany: USD 4.6 trillion in 2023
Germany is projected to cling onto fourth place, with nominal GDP of USD 4.6 trillion (2018: USD 4.0 trillion); however, like Japan, the country’s unfavorable demographics will weigh on economic momentum in the coming years.
5. India: USD 4.3 trillion in 2023
India is set to become the world’s fifth largest economy in 2023, with nominal GDP of USD 4.3 trillion (2018: USD 2.7 trillion), overtaking both France and the UK, and on the verge of surpassing Germany. That said, Indian growth prospects have dimmed somewhat since the government announced in late 2019 that it would bow out of the Regional Comprehensive Economic Partnership—a free-trade pact under discussion between ASEAN, Australia, China, Japan, New Zealand and South Korea.
Originally published in December 2017, updated in January 2020
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.
Date: January 27, 2020
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