The global economy works in cycles, and the fluctuations during periods of expansion and recession can be easily noticeable. A close analysis can show us the major players, those that dominate the global economic market and maintain their top positions despite the cyclical challenges.

In this study, we will analyze the world's strongest economies by following the modifications the list of the richest countries has seen over the last decades. That can help us create a detailed mapping of the general economic background and see which are the economies that are the most resilient in the face of global change.

Share and embed on your website:

As we understand the global economic landscape and see the patterns in these world giants' economic activity, we can estimate what the next decades are likely to bring. We can apply the patterns we have noticed in the past to the current global situation and determine how global expansion will look like over the next decades.

To see the exact evolution of the global economy, we will analyze the changes in GDP for each of the major players. The GDP, or gross domestic product, is a clear indicator of each economy's health level. If we go even deeper and look at the GDP per capita, we can see the average living standards and economic strength.

Therefore, we will go over the past 30 years' economic history and see how the GDP numbers have changed. It will also show us which economies are a constant presence in the top of the richest countries and which are only temporarily on top, only to go through recession periods later on.

GDP Ranked by Country 1960-2019 development

Despite the multiple challenges and difficult cycles, it is apparent that a few economies manage to stick to the top. If we compare the strongest economies in 1980 to the current list, we will see that most of them are still present; there are only three new players.

On the other hand, if we follow the numbers over the 30 years period, we can also notice significant fluctuations in individual economies. While the U.S. seems to have a firm grip on the first place, the rest of the leaderboard has some interesting changes.

These are the prominent major economic players, and it's interesting to see that the top 10 occupants alone cover almost 70% of the world's economy. If we consider the top 20 countries, they represent nearly 80%, so the biggest economic strength remains in the first ten positions.

The Indisputable Leader

The United States is, without any doubt, the obvious leader, maintaining the number one spot all through different economic cycles. If we look at the 1960 rankings, the difference in GDP between the U.S. and the U.K., which comes second, is monumental. But the fact is the United States has been occupying the top position ever since 1871, especially once the railroad network was created, boosting economic activities and expanding urban regions. And so far, nothing seems to threaten their dominance.

Indeed, if we consider the 2019 chart, China is getting quite close, but the next few years are crucial, and it remains to be seen if China manages to hold the high position or even become number one.

So far, the U.S. represents almost a quarter of the global economy and is strongly holding its ground. However, if we consider the purchasing power parity [1], things are a bit different, as China is taking the lead.

Considering the top 10 occupants' GDP numbers, the difference between the number one ranking and the tenth place is enormous. In 2019, Canada occupied the tenth position with 1,736.251 b$, while the U.S. registered an impressive 21,431.552 b$.

If we look at the progress over these three decades, it's evident that the United States has quite a constant growth, with a few minor exceptions. That's the clear indicator that it's the world's leading economy. And it makes sense if we consider the natural resources and the infrastructure they benefit from, as well as the continually advancing technology.

China's Impressive Progress

China definitely had one of the most spectacular evolutions in terms of GDP levels over the last decades. It was always one of the top economies, but at some point, its trajectory became so vertical, it seemed nothing could stop it.

In 1977, China was number nine on the list, with a GDP of 174.938 b$, and the next year it even dropped to 11th position temporarily. The 80s came with a certain improvement, as we can see a spike in the first part of the decade. But it was in the 90s that China really started to grow, and the climb continued year after year. In 2009, it was already in the second position, and the distance from the third place, occupied by Japan, continued to increase. Except for a temporary slow-down in 2015[2], the progress continued.

In 2019, China had a GDP of 14,363.577 b$ - a massive difference from its level in the 70s. The outstanding evolution happened because of the essential decision of changing from a closed economy to a genuine global hub in terms of manufacturing and exporting almost everything. While the pace has slowed down a bit in the last years, the progress this economy has made is superlative.

Germany's Fast Ascension to the Top

Looking back, Germany was extremely far from the top 10 until the 70s, when it seemed to appear out of nowhere and went straight to fighting Japan for second place. The next two decades were a mixture of temporary holdbacks and slow progress, but the position on the chart was the same. Things changed in 2009 when Germany lost 2nd place to China. Considering the economic explosion that the Asian giant went through, it would have been impossible for a European economy to keep up. Still, Germany managed to remain number 4 ever since.

In terms of GDP numbers, Germany went from 242.587 b$ in 1970 to 3,213.863 b$ in 2006, and 3,846.333 b$ in 2019. So not only does it dominate the European economic landscape, but it's also one of the strongest presences in the global chart.

The export of capital goods was the recipe for success in this case, which meant that recession periods took a toll on the economy. As a response, Germany prepared a strategic initiative called Industrie 4.0 [3], which helped secure a steady top position that is hard to tackle with.

Other Major Players

As we mentioned, the top 20 positions didn't see extreme changes, with a few noteworthy exceptions. That means that a few strong economies managed to grow and remain at a high level over the course of these three decades. Let's take a look at the major players, their progress, and their strong points.

Japan is, without any doubt, one of the world's strongest economies. It was in the top 5 since the beginning of the period and remained there, with little modifications ever since. Japan had a thriving economic period in the 80s and the first part of the 90s. It only lost the 2nd place in 2009, when China came strongly from behind, in an unstoppable ascending trajectory.

Still, Japan remains a dominant presence in the top 5, with a GDP of 5,082.782 b$ in 2019. The high position is even more impressive if we consider the obstacles like the global crisis and the major earthquake from 2011, which affected all sectors, including the economy.

The United Kingdom was in a strong position in the 60s but started to move downwards, especially after Germany's ascension. Its trajectory is similar to that of France, as the two economic powers proved to be close competitors. They both managed to stay on top, continually exchanging the 5th and the 6th position, until 2019, when India managed to get on the 5th position and break the pattern.

India is, in fact, one of the economies that had quite impressive ascensions. While it did great in the 60s, it started the 80s in the 13th place and had a major drop in the 90s. Things improved significantly after 2009, and the sudden growth that began in 2014 continued until India reached number 5 in the charts in 2019.

Indeed, the GDP per capita is lower due to the high population. But considering the expansion it undergoes in so many economic sectors, the emergence is justified and likely to continue. Apart from manufacturing, a massive growth happened in the service sector, which registered the highest development in the world and now covers about 60% of India's economy.

Combining factors like the rising middle class, robust agricultural and manufacturing sectors, not to mention the countless services outsourced to India, set the grounds for continuing the escalating path. Indeed, a change significant enough to improve the entire population's living standards will probably take decades [4], but the progress is encouraging.

Apart from the first positions and the countries with the most spectacular evolutions, a few economies maintained a relatively secure position, like Italy, Brazil, Canada, or Spain. Russia's ascension may have started a bit later, but it constantly grew, until a GDP of 1,703.013 b$ and the 11th position in 2019.

A Global View

As we mentioned, the top 20 positions didn't see extreme changes, with a few noteworthy exceptions. That means that a few strong economies managed to grow and remain at a high level over the course of these three decades. Let's take a look at the major players, their progress, and their strong points.

On the other hand, China is the strongest competitor at this point. Still, given the way the Covid-19 pandemic has shifted the economic grounds and changed political strategies, we cannot be sure how things are about to evolve. The U.S. has expressed the intention to limit China's influence by opting for different supply chains [5], but it isn't clear at this point whether this will have a significant impact.

When it comes to investors, they have two strategies to choose from. On the one hand, many economically stable countries managed to stay on top for decades, without significant fluctuations; they are the safe choice. On the other hand, investing in a competitive economy can lead to skyrocketing profits, but with a higher risk level.

As seen above, many of these economic giants are well-structured and balance how different sectors develop and maintain at a profitable level. Others concentrate on one strong industry and maximize their efforts in that direction.

Indeed, economies can be analyzed from many perspectives. But we have focused on the GDP because it is an excellent indicator of how healthy a country's economy is and how it reflects in the standard of living. GDP also helps specialists analyze the situation as a whole and foresee whether potential threats like a possible recession can drastically change the situation [6].

Even understanding the patterns we have noticed over the last 30 years, making provisions for the next period isn't that easy. The pandemic is an element that can change the global economic climate drastically. Unemployment is a general problem, and the sectors that were once thriving are now in severe distress. So, the chart for the next decade may see some modifications.