Markets
The $86 Trillion World Economy in One Chart
The $86 Trillion World Economy in One Chart
The world economy is in a never-ending state of flux.
The fact is that billions of variables — both big and small — factor into any calculation of overall economic productivity, and these inputs are changing all of the time.
Buying this week’s groceries or filling up your car with gas may seem like a rounding error when we are talking about trillions of dollars, but every microeconomic decision or set of preferences can add up in aggregate.
And as consumer preferences, technology, trade relationships, interest rates, and currency valuations change — so does the final composition of the world’s $86 trillion economy.
Country GDPs, by Size
Today’s visualization comes to us from HowMuch.net, and it charts the most recent composition of the global economic landscape.
It should be noted that the diagram uses nominal GDP to measure economic output, which is different than using GDP adjusted for purchasing power parity (PPP). The data in the diagram and table below come from the World Bank’s latest update, published in July 2019.
The Top 15 Economies, by GDP
| Rank | Country | GDP (Nominal, USD) | Share of World Total (%) |
|---|---|---|---|
| #1 | 🇺🇸 United States | $20.49 trillion | 23.89% |
| #2 | 🇨🇳 China | $13.61 trillion | 15.86% |
| #3 | 🇯🇵 Japan | $4.97 trillion | 5.79% |
| #4 | 🇩🇪 Germany | $4.00 trillion | 4.66% |
| #5 | 🇬🇧 United Kingdom | $2.83 trillion | 3.29% |
| #6 | 🇫🇷 France | $2.78 trillion | 3.24% |
| #7 | 🇮🇳 India | $2.73 trillion | 3.18% |
| #8 | 🇮🇹 Italy | $2.07 trillion | 2.42% |
| #9 | 🇧🇷 Brazil | $1.87 trillion | 2.18% |
| #10 | 🇨🇦 Canada | $1.71 trillion | 1.99% |
| #11 | 🇷🇺 Russian Federation | $1.66 trillion | 1.93% |
| #12 | 🇰🇷 Korea, Rep. | $1.62 trillion | 1.89% |
| #13 | 🇦🇺 Australia | $1.43 trillion | 1.67% |
| #14 | 🇪🇸 Spain | $1.43 trillion | 1.66% |
| #15 | 🇲🇽 Mexico | $1.22 trillion | 1.43% |
The above 15 economies represent a whopping 75% of total global GDP, which added up to $85.8 trillion in 2018 according to the World Bank.
Most interestingly, the gap between China and the United States is narrowing — and in nominal terms, China’s economy is now 66.4% the size.
A Higher Level Look
The World Bank also provides a regional breakdown of global GDP, which we helps to give additional perspective:
| Rank | Geographic Region | GDP (Nominal, USD) | Global Share |
|---|---|---|---|
| #1 | East Asia & Pacific | $25.9 trillion | 30.2% |
| #2 | Europe & Central Asia | $23.0 trillion | 26.8% |
| #3 | North America | $22.2 trillion | 25.9% |
| #4 | Latin America & Caribbean | $5.8 trillion | 6.8% |
| #5 | Middle East & North Africa | $3.6 trillion | 4.2% |
| #6 | South Asia | $3.5 trillion | 4.1% |
| #7 | Sub-Saharan Africa | $1.7 trillion | 2.0% |
| World Total | $85.8 trillion | 100.0% |
The organization breaks it down by income levels, as well:
| Income Level | GDP (Nominal, USD) | Global Share |
|---|---|---|
| High income countries | $54.1 trillion | 63.1% |
| Upper middle income countries | $24.4 trillion | 28.4% |
| Lower middle income countries | $6.7 trillion | 7.8% |
| Low income countries | $0.6 trillion | 0.7% |
| World total | $85.8 trillion | 100.00% |
The low income countries — which have a combined population of about 705 million people — add up to only 0.6% of global GDP.
Looking Towards the Future
For more on the world economy and predictions on country GDPs on a forward-looking basis, we suggest looking at our animation on the Biggest Economies in 2030.
It is worth mentioning, however, that the animation uses GDP (PPP) calculations instead of the nominal ones above.
Markets
The Top Google Searches Related to Investing in 2022
What was on investors’ minds in 2022? Discover the top Google searches and how the dominant trends played out in portfolios.
The Top Google Searches Related to Investing in 2022
It was a turbulent year for the markets in 2022, with geopolitical conflict, rising prices, and the labor market playing key roles. Which stories captured investors’ attention the most?
This infographic from New York Life Investments outlines the top Google searches related to investing in 2022, and offers a closer look at some of the trends.
Top Google Searches: Year in Review
We picked some of the top economic and investing stories that saw peak search interest in the U.S. each month, according to Google Trends.
| Month of Peak Interest | Search Term |
|---|---|
| January | Great Resignation |
| February | Russian Stock Market |
| March | Oil Price |
| April | Housing Bubble |
| May | Value Investing |
| June | Bitcoin |
| July | Recession |
| August | Inflation |
| September | US Dollar |
| October | OPEC |
| November | Layoffs |
| December | Interest Rate Forecast |
Data based on exact searches in the U.S. from December 26, 2021 to December 18, 2022.
Let’s look at each quarter in more detail, to see how these top Google searches were related to activity in the economy and investors’ portfolios.
Q1 2022
The start of the year was marked by U.S. workers quitting their jobs in record numbers, and the effects of the Russia-Ukraine war. For instance, the price of crude oil skyrocketed after the war caused supply uncertainties. Early March’s peak of $125 per barrel was a 13-year high.
| Date | Closing Price of WTI Crude Oil (USD/Barrel) |
|---|---|
| January 2, 2022 | $76 |
| March 3, 2022 | $125 |
| December 29, 2022 | $80 |
While crude oil lost nearly all its gains by year-end, the energy sector in general performed well. In fact, the S&P 500 Energy Index gained 57% over the year compared to the S&P 500’s 19% loss.
Q2 2022
The second quarter of 2022 saw abnormal house price growth, renewed interest in value investing, and a bitcoin crash. In particular, value investing performed much better than growth investing over the course of the year.
| Index | Price Return in 2022 |
|---|---|
| S&P 500 Value Index | -7.4% |
| S&P 500 Growth Index | -30.1% |
Value stocks have typically outperformed during periods of rising rates, and 2022 was no exception.
Q3 2022
The third quarter was defined by worries about a recession and inflation, along with interest in the rising U.S. dollar. In fact, the U.S. dollar gained against nearly every major currency.
| Currency | USD Appreciation Against Currency (Dec 31 2020-Sep 30 2022) |
|---|---|
| Japanese Yen | 40.1% |
| Chinese Yuan | 9.2% |
| Euro | 25.1% |
| Canadian Dollar | 7.2% |
| British Pound | 22.0% |
| Australian Dollar | 18.1% |
Higher interest rates made the U.S. dollar more attractive to investors, since it meant they would get a higher return on their fixed income investments.
Q4 2022
The end of the year was dominated by OPEC cutting oil production, high layoffs in the tech sector, and curiosity about the future of interest rates. The Federal Reserve’s December 2022 economic projections offer clues about the trajectory of the policy rate.
| 2023 | 2024 | 2025 | Longer Run | |
|---|---|---|---|---|
| Minimum Projection | 4.9% | 3.1% | 2.4% | 2.3% |
| Median Projection | 5.1% | 4.1% | 3.1% | 2.5% |
| Maximum Projection | 5.6% | 5.6% | 5.6% | 3.3% |
The Federal Reserve expects interest rates to peak in 2023, with rates to remain elevated above pre-pandemic levels for the foreseeable future.
The Top Google Searches to Come
After a year of volatility across asset classes, economic uncertainty remains. Which themes will become investors’ top Google searches in 2023?
Find out how New York Life Investments can help you make sense of market trends.
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