World economy

For other uses, see World Economy (disambiguation).

The world economy or global economy is the economy of all humans of the world, referring to the global economic system, which includes all economic activities which are conducted both within and between nations, including production, consumption, economic management, work in general, exchange of financial values and trade of goods and services. In some contexts, the two terms are distinct "international" or "global economy" being measured separately and distinguished from national economies, while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use and exchange, the definitions, representations, models and valuations of the world economy vary widely. It is inseparable from the geography and ecology of planet Earth.

It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research, genuine data or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is, by definition, no legal market of any kind.

However, even in cases in which there is a clear and efficient market to establish a monetary value, economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy since exchange rates typically do not closely reflect worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government.

Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real United States dollars or euros. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 7.8 billion people (as of March 2020) have most of their economic activity reflected in these valuations.

According to Maddison, until the middle of the 19th century, global output was dominated by China and India. Waves of the Industrial Revolution in Western Europe and Northern America shifted the shares to the Western Hemisphere. As of 2022, the following 18 countries or collectives have reached an economy of at least US$2 trillion by GDP in nominal or PPP terms: Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, Spain, Turkey, the United Kingdom, the United States and the European Union.

Despite high levels of government investment, the World Bank predicted that the global economy would decrease by 5.2 percent in 2020. Cities account for 80% of global GDP, thus they would face the brunt of this decline.

Overview

World economy by country groups

Country group	List of country groups by GDP (nominal) in 2022 (or at peaked level)		List of country groups by GDP (PPP) in 2022 (or at peaked level)		Number of countries	Major economies
	Value (in millions of US$)	Share of Global GDP	Value (in millions of US$)	Share of Global GDP
Major advanced economies (G7)	43,540,780	42.9%	49,188,977	30.5%	7	United States Japan Germany United Kingdom France Italy Canada
Emerging and developing Asia	25,627,820	25.2%	53,181,644	32.9%	30	China India Indonesia Thailand Bangladesh Vietnam Philippines Malaysia
Other advanced economies (advanced economies excluding the G7)	13,788,040	13.6%	18,284,497	11.3%	33	South Korea Spain Australia Taiwan Netherlands Switzerland Belgium Singapore Sweden Ireland Austria
Middle East and Central Asia	6,276,628	6.2%	12,204,700	7.6%	32	Saudi Arabia Iran Egypt Pakistan United Arab Emirates Algeria Kazakhstan
Latin America and the Caribbean	5,734,326 (peaked at 6,061,009 in 2013)	5.6%	11,834,609	7.3%	33	Brazil Mexico Argentina Colombia
Emerging and developing Europe	4,556,011 (peaked at 4,573,783 in 2013)	4.5%	11,664,293	7.2%	16	Russia Turkey Poland Romania
Sub-Saharan Africa	2,037,295	2.0%	5,090,793	3.2%	45	Nigeria South Africa
World	101,560,901	100.0%	161,449,514	100.0%	196

Current world economic league table of largest economies in the world by GDP and share of global economic growth

The 25 largest economies by GDP (nominal), twenty largest economies by GDP (PPP) as of 2022. Members of the G-20 major economies are in bold.
List of the 25 largest economies by GDP (nominal) at their peak level as of 2022 in million US$	List of the 25 largest economies by GDP (PPP) at their peak level as of 2022 in million Int$	List of the 25 economies by highest GDP (nominal) per capita at their peak level as of 2022 in US$	List of the 25 economies by highest GDP (PPP) per capita at their peak level as of 2022 in Int$
Rank Country Value Peak year — World 101,560,901 2022 1 United States 25,035,164 2022 — European Union 19,226,235 2008 2 China 18,321,197 2022 3 Japan 6,272,364 2012 4 Germany 4,262,767 2021 5 India 3,468,566 2022 6 United Kingdom 3,198,470 2022 7 France 2,957,425 2021 8 Brazil 2,614,027 2011 9 Italy 2,408,391 2008 10 Russia 2,288,428 2013 11 Canada 2,200,352 2022 12 Iran 1,973,738 2022 13 South Korea 1,810,966 2021 14 Australia 1,724,787 2022 15 Spain 1,631,685 2008 16 Mexico 1,424,533 2022 17 Indonesia 1,289,429 2022 18 Netherlands 1,013,520 2021 19 Saudi Arabia 1,010,588 2022 20 Turkey 957,504 2013 21 Taiwan 828,659 2022 22 Switzerland 807,418 2022 23 Poland 716,305 2022 24 Argentina 643,861 2017 25 Sweden 635,664 2021	Rank Country Value Peak year — World 161,449,514 2022 1 China 30,074,380 2022 2 United States 25,035,164 2022 — European Union 24,048,856 2022 3 India 11,665,486 2022 4 Japan 6,109,961 2022 5 Germany 5,316,933 2022 6 Russia 4,649,674 2022 7 Indonesia 4,023,501 2022 8 Brazil 3,782,763 2022 9 United Kingdom 3,776,044 2022 10 France 3,688,323 2022 11 Turkey 3,320,994 2022 12 Italy 3,022,162 2022 13 Mexico 2,919,875 2022 14 South Korea 2,765,834 2022 15 Canada 2,240,390 2022 16 Spain 2,215,992 2022 17 Saudi Arabia 2,018,260 2022 18 Egypt 1,661,955 2022 19 Taiwan 1,621,702 2022 20 Australia 1,615,286 2022 21 Iran 1,599,249 2022 22 Poland 1,599,020 2022 23 Pakistan 1,512,476 2022 24 Thailand 1,479,644 2022 25 Bangladesh 1,345,646 2022	Rank Country Value Peak year 1 Luxembourg 136,701 2021 2 Norway 102,577 2013 3 Ireland 102,217 2022 4 Qatar 101,933 2012 5 Switzerland 92,434 2022 6 Macau 86,298 2014 7 Singapore 79,426 2022 8 San Marino 79,110 2008 9 Iceland 75,374 2018 10 United States 75,180 2022 11 Australia 68,441 2012 12 Denmark 68,202 2021 13 Sweden 60,845 2013 14 Netherlands 58,015 2008 15 Canada 56,794 2022 16 Israel 55,359 2022 17 Finland 53,898 2008 18 Austria 53,332 2021 19 Andorra 51,957 2011 20 Belgium 51,849 2021 21 Germany 51,238 2021 22 United Kingdom 50,676 2007 23 Hong Kong 49,865 2021 24 Japan 49,175 2012 25 New Zealand 48,317 2021	Rank Country Value Peak year 1 Qatar 169,698 2012 2 Macau 145,947 2013 3 Luxembourg 141,587 2022 4 Singapore 131,426 2022 5 Ireland 131,034 2022 6 United Arab Emirates 110,147 2004 7 Brunei 88,312 2012 8 Switzerland 84,469 2022 9 Norway 78,128 2022 10 United States 75,180 2022 11 San Marino 75,030 2008 12 Kuwait 72,736 2012 13 Hong Kong 69,987 2022 14 Denmark 69,845 2022 15 Netherlands 69,715 2022 16 Taiwan 69,500 2022 17 Austria 66,680 2022 18 Iceland 66,467 2022 19 Andorra 65,372 2022 20 Sweden 63,877 2022 21 Germany 63,835 2022 22 Australia 62,192 2022 23 Belgium 62,065 2022 24 Finland 58,659 2022 25 Bahrain 57,921 2022

Twenty largest economies in the world by nominal GDP

Main article: List of countries by past and projected GDP (nominal)

Statistical indicators

Finance

Countries or territories by GDP (PPP) per capita in 2021.

>$60,000   $50,000 – $60,000   $40,000 – $50,000   $30,000 – $40,000

$20,000 – $30,000   $10,000 – $20,000   $5,000 – $10,000   $2,500 – $5,000

$1,000 – $2,500   <$1,000   No data

Countries by total wealth (trillions USD), Credit Suisse

• GDP (GWP) (gross world product): (purchasing power parity exchange rates) – $59.38 trillion (2005 est.), $51.48 trillion (2004), $23 trillion (2002). The GWP is the combined gross national income of all the countries in the world. When calculating the GWP, add GDP of all countries. Also, GWP shows that imports and exports are equal. Because imports and exports balance exactly when considering the whole world:, this also equals the total global gross domestic product (GDP). According to the World Bank, the 2013 nominal GWP was approximately US$75.59 trillion. In 2017, according to the CIA's World Factbook, the GWP was around US$80.27 trillion in nominal terms and totaled approximately 127.8 trillion international dollars in terms of purchasing power parity (PPP). The per capita PPP GWP in 2017 was approximately Int$17,500 according to the World Factbook.
• GDP (GWP) (gross world product): (market exchange rates) – $60.69 trillion (2008). The market exchange rates increased from 1990 to 2008. The reason for this increase is the world's advancement in terms of technology.
• GDP (real growth rate): The following part shows the GDP growth rate and the expected value after one year.
  • Developed Economies. A developed country, industrialized country, more developed country (MDC), or more economically developed country (MEDC), is a sovereign state that has a developed economy and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for evaluating the degree of economic development are gross domestic product (GDP), gross national product (GNP), the per capita income, level of industrialization, amount of widespread infrastructure and general standard of living. Which criteria are to be used and which countries can be classified as being developed are subjects of debate. The GDP of the developed countries is predicted to fall from 2.2% in 2017 to 2.0% in 2018 due to the fall in dollar value.
  • Developing Countries. A developing country is a country with a less developed industrial base (industries) and a low Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreement on which countries fit this category. A nation's GDP per capita, compared with other nations, can also be a reference point. In general, the United Nations accepts any country's claim of itself being "developing". The GDP of the developing countries is expected to rise from 4.3% in 2017 to 4.6% in 2018 due to political stability in those countries and advancement in technology.
  • Least developed countries. The least developed countries (LDCs) is a list of developing countries that, according to the United Nations, exhibit the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world. The concept of LDCs originated in the late 1960s and the first group of LDCs was listed by the UN in its resolution 2768 (XXVI) of 18 November 1971. This is a group of countries that are expected to improve their GDP from 4.8% in 2017 to 5.4% in 2018. The predicted growth is associated advancement in technology and industrialization of those countries for the past decade.
• GDP – per capita: purchasing power parity – $9,300, €7,500 (2005 est.), $8,200, €6,800 (92) (2003), $7,900, €5,000 (2002)
• World median income: purchasing power parity $1,041, €950 (1993)
• GDP – composition by sector: agriculture: 4%; industry: 32%; services: 64% (2004 est.)
• Inflation rate (consumer prices); In economics, inflation is a general rise in the price level in an economy over a period of time, resulting in a sustained drop in the purchasing power of money. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. The opposite of inflation is deflation, a sustained decrease in the general price level of goods and services. The common measure of inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time. national inflation rates vary widely in individual cases, from declining prices in Japan to hyperinflation (In economics, hyperinflation is very high and typically accelerating inflation) in several Third World countries (2003):
  • World 2.6% (2017), 2.8% (predicted 2018);
  • Developed Economies 1% to 4% typically
  • Developing Countries 5% to 60% typically
  • Least developed countries 11.4% (2017), 8.3% (predicted 2018)
• Derivatives OTC outstanding notional amount: $601 trillion (Dec 2010) ([1])
• Derivatives exchange traded outstanding notional amount: $82 trillion (June 2011) ([2])
• Global debt issuance: $5.187 trillion, €3 trillion (2004), $4.938 trillion, €3.98 trillion (2003), $3.938 trillion (2002) (Thomson Financial League Tables)
• Global equity issuance: $505 billion, €450 billion (2004), $388 billion. €320 billion (2003), $319 billion, €250 trillion (2002) (Thomson Financial League Tables)

Employment

World GDP per capita between 1500 and 2000 (log scale)

World GDP per capita between 1500 and 2003

GDP increase, 1990–1998 and 1990–2006, in major countries

• Unemployment rate: 8.7% (2009 est.). 30% (2007 est.) combined unemployment and underemployment in many non-industrialized countries; developed countries typically 4%–12% unemployment.

Industries

• Industrial production growth rate: 3% (2002 est.)

Energy

Global primary energy consumption, measured in terawatt-hours (TWh) per year

Further information: World energy supply and consumption and Energy development

• Yearly electricity – production: 21,080,878 GWh (2011 est.), 15,850,000 GWh (2003 est.), 14,850,000 GWh (2001 est.)
• Yearly electricity – consumption: 14,280,000 GWh (2003 est.), 13,930,000 GWh (2001 est.)
• Oil – production: 79,650,000 bbl/d (12,663,000 m³/d) (2003 est.), 75,460,000 barrels per day (11,997,000 m³/d) (2001)
• Oil – consumption: 80,100,000 bbl/d (12,730,000 m³/d) (2003 est.), 76,210,000 barrels per day (12,116,000 m³/d) (2001)
• Oil – proved reserves: 1.025 trillion barrel (163 km³ (39 cu mi) (2001 est.)
• Natural gas – production: 3,366 km³ (808 cu mi) (2012 est.), 2,569 km³ (616 cu mi) (2001 est.)
• Natural gas – consumption: 2,556 km³ (613 cu mi) (2001 est.)
• Natural gas – proved reserves: 161,200 km³ (38,700 cu mi) (1 January 2002)

Cross-border

• Yearly exports: $12.4 trillion, €11.05 trillion (2009 est.)
• Exports – commodities: the whole range of industrial and agricultural goods and services
• Exports – partners: US 12.7%, Germany 7.1%, China 6.2%, France 4.4%, Japan 4.2%, UK 4.1% (2008)
• Yearly imports: $12.29 trillion, €10.95 trillion (2009 est.)
• Imports – commodities: the whole range of industrial and agricultural goods and services
• Imports – partners: China 10.3%, Germany 8.6%, US 8.1%, Japan 5% (2008)
• Debt – external: $56.9 trillion, €40 trillion (31 December 2009 est.)

Gift economy

• Yearly economic aid – recipient: net Official Development Assistance (ODA) of $135.2 billion (2014)

Communications

Telephones – main lines in use: 843,923,500 (2007)
4,263,367,600 (2008)

• Telephones – mobile cellular: 3,300,000,000 (Nov. 2007)
• Internet Service Providers (ISPs): 10,350 (2000 est.)
• Internet users: 3,079,339,857 (31 December 2014 [3]), 360,985,492 (31 December 2000)

Transport

See also: Transport § Economic, and Category:Transport infrastructure

Transportation infrastructure worldwide includes:

• Airports
  • Total: 41,821 (2013)
• Roadways
  • Total: 32,345,165 km (20,098,354 mi)
  • Paved: 19,403,061 km (12,056,503 mi)
  • Unpaved: 12,942,104 km (8,041,851 mi) (2002)
• Railways
  • Total: 1,122,650 km (697,580 mi) includes about 190,000 to 195,000 km (118,000 to 121,000 mi) of electrified routes of which 147,760 km (91,810 mi) are in Europe, 24,509 km (15,229 mi) in the Far East, 11,050 km (6,870 mi) in Africa, 4,223 km (2,624 mi) in South America, and 4,160 km (2,580 mi) in North America.

Military

A pie chart showing global military expenditures by country for 2019, in US$ billions, according to SIPRI.

• World military expenditure in 2018: estimated to $1.822 trillion
• Military expenditures – percent of GDP: roughly 2% of gross world product (1999).

Science, research and development

See also: List of sovereign states by research and development spending, Economics of science, and Innovation

Number of scientific or technical journal article publications per million residents as of 2013.

The Royal Society in a 2011 report stated that in terms of number of papers the share of English-language scientific research papers the United States was first followed by China, the UK, Germany, Japan, France, and Canada. In 2015, research and development constituted an average 2.2% of the global GDP according to the UNESCO Institute for Statistics. Metrics and rankings of innovation include the Bloomberg Innovation Index, the Global Innovation Index and the share of Nobel laureates per capita.

Resources and environment

See also: Primary sector of the economy, Sustainable development, Economic impacts of climate change, Environmental resource management § Economics, Planetary management, Agriculture, Overexploitation, Overconsumption, and Ecosystem service

Further information: 2021 in the environment and environmental sciences § International goals

Shown is how the global material footprint and global CO2 emissions from fossil-fuel combustion and industrial processes changed compared with global GDP.

Deforestation of tropical rainforest and woodland (1700-2004)

• Forests (carbon sinks, wood, ecosystem services, ...)
  • Estimated number of trees that are net lost annually as of 2021: 10 billion
  • Global annual deforested land in 2015–2020: 10 million hectares
  • Global annual net forest area loss in 2000–2010 : 4.7 million hectares
• Other land degradation and land- and organisms-related ecosystem disturbances
  • Soils (carbon sink, ecosystem services, food production, ...)
    • Soil erosion by water in 2012: almost 36 billion tons (based on a high resolution global potential soil erosion model developed in 2017)
    • Estimated annual loss of agricultural productivity due to soil erosion: 8 billion US dollars (based on the soil erosion data)
    • Soil erosion by water in 2015: approximately 43 billion tons (according to a 2020 study)
    • Environmental impact of pesticides
      • Pesticide use in tonnes of active ingredient in Australia in 2016: ca. 62,500 tonnes
• Oceans (ecosystem services, food production, ...): Blue economy
• Waste and pollution (effects of economic mechanisms, effects on ecosystem services)
  • As of 2018, about 380 million tonnes of plastic is produced worldwide each year. From the 1950s up to 2018, an estimated 6.3 billion tonnes of plastic has been produced worldwide, of which an estimated 9% has been recycled and another 12% has been incinerated with the rest reportedly being "dumped in landfills or the natural environment".
  • Air pollution
    • Number of human deaths caused annually by air pollution worldwide: ca. 7 million
    • Estimated global annual cost of air pollution: $5 trillion
  • Microplastic pollution
    • Estimated accumulated number of microplastic particles in the North Atlantic Ocean in 2014: 15 to 51 trillion particles, weighing between 93,000 and 236,000 metric tons
    • Estimated accumulated number of microplastic particles in the North Atlantic Ocean in 2020: 3700 microplastics per cubic meter

From the scientific perspective, economic activities are embedded in a web of dynamic, interrelated, and interdependent activities that constitute the natural system of Earth. Novel application of cybernetics in decision-making (such as in decision-making related to process- and product-design and related laws) and direction of human activity (such as economic activity) may make it easier to control modern ecological problems.

Historical development

Further information: History of globalization and Broad measures of economic progress

Shift of the world's economic center of gravity since 1980 and projected until 2050

Estimations of world population and GDP from a 2020 research paper
Year	Population (million)	GDP per capita ($1990 in PPP)	GDP in billion ($1990 in PPP)
1000000 BCE	0.125	400	0.05
300000 BCE	1	400	0.40
25000 BCE	3.34	400	1.34
10000 BCE	4	400	1.60
5000 BCE	5	404	2.02
4000 BCE	7	409	2.87
3000 BCE	14	421	5.90
2000 BCE	27	433	11.7
1000 BCE	50	444	22.2
500 BCE	100	457	45.7
200 BCE	150	465	69.7
1	168	467	78.4
200	190	463	88.0
400	190	463	88.0
500	190	463	88.0
600	200	462	92.3
700	210	460	96.6
800	220	459	101
900	240	456	109
1000	265	453	120
1100	320	512	164
1200	360	551	198
1300	360	551	198
1400	350	541	190
1500	438	625	274
1600	556	629	350
1700	603	658	397
1820	1,042	712	741
1870	1,276	884	1,128
1900	1,563
1913	1,793	1,543	2,767
1920	1,863
1940	2,299	2,181	5,013
1950	2,528	2,104	5,318
1960	3,042	2,764	12,170
1970	3,691	3,725	13,751
1980	4,440	4,511	20,026
1990	5,269	5,149	27,133
2000	6,077	6,057	36,806
2010	6,873	7,814	53,704
2019	7,620	9,663	73,640

One example for a comparable metric other than GDP are the OECD Better Life Index rankings for different aggregative domains.

Legend
Explained by: Housing   Explained by: Income   Explained by: Jobs	Explained by: Community   Explained by: Education   Explained by: Environment	Explained by: Civic engagement   Explained by: Health   Explained by: Life Satisfaction	Explained by: Safety   Explained by: Work-Life Balance

OECD Better Life Index rankings for 2016
Overall Rank	Country	Housing	Income	Jobs	Community	Education	Environment	Civic engagement	Health	Life Satisfaction	Safety	Work-Life Balance
1	Norway
2	Australia
3	Denmark
4	Switzerland
5	Canada
6	Sweden
7	New Zealand
8	Finland
9	United States
10	Iceland
11	Netherlands
12	Germany
13	Luxembourg
14	Belgium
15	Austria
16	United Kingdom
17	Ireland
18	France
19	Spain
20	Slovenia
21	Czech Republic
22	Estonia
23	Japan
24	Slovakia
25	Italy
26	Israel
27	Poland
28	South Korea
29	Portugal
30	Latvia
31	Greece
32	Hungary
33	Russia
34	Chile
35	Brazil
36	Turkey
37	Mexico
38	South Africa

The index includes 11 comparable "dimensions" of well-being:

1. Housing: housing conditions and spendings (e.g. real estate pricing)
2. Income: household income (after taxes and transfers) and net financial wealth
3. Jobs: earnings, job security and unemployment
4. Community: quality of social support network
5. Education: education and what one gets out of it
6. Environment: quality of environment (e.g. environmental health)
7. Governance: involvement in democracy
8. Health
9. Life Satisfaction: level of happiness
10. Safety: murder and assault rates
11. Work-life balance

Economic studies

To promote exports, many government agencies publish on the web economic studies by sector and country. Among these agencies include the USCS (US DoC) and FAS (USDA) in the United States, the EDC and AAFC in Canada, Ubifrance in France, the UKTI in the United Kingdom, the HKTDC and JETRO in Asia, Austrade and the NZTE in Oceania. Through Partnership Agreements, the Federation of International Trade Associations publishes studies from several of these agencies (USCS, FAS, AAFC, UKTI, and HKTDC) as well as other non-governmental organizations on its website globaltrade.net.

See also

• Anarchy (international relations)
• Capitalism
• Common Wealth: Economics for a Crowded Planet (book)
• Economic bubble
• Economic collapse
• Emerging and growth-leading economies
• Fourth Industrial Revolution
• Global financial system
• Global workforce
• Globality
• Globalization
• International trade
• Trade route
• Overconsumption
• Petrodollar recycling
• World Trade Report
• World history
  • Economic history of the world
• World-systems theory

Regional economies:

• Economy of Africa
• Economy of Asia
• Economy of Europe
• Economy of North America
• Economy of Oceania
• Economy of South America

Events:

• Great Recession
• World oil market chronology from 2003
• 2007–2008 financial crisis
• 2007–2008 world food price crisis
• Economic impact of the COVID-19 pandemic

Lists:

• List of countries by GDP sector composition
• List of world's largest economies (nominal) – based on current currency market exchange rates
• List of world's largest economies (PPP) – based on purchasing power parity
• Historical list of world's largest economies (PPP) – for the years between 1 and 1998

External links

• OECD – Economic Outlook
• US Bureau of Labor and Statistics, Major Economic Indicators
• IMF – World Economic Outlook
• UN DESA – World Economy publications
• CIA – The World Factbook – World
• Career Education for a Global Economy
• BBC News Special Report – Global Economy
• Guardian Special Report – Global Economy
• World Bank Summary Trade Statistics for World