Top Economies that Move the Markets
As countries participate in international trade, the influence of one country on the global economy may be significant.
The significance comes from whether they produce, mine or manufacture a unique good or service that not many other countries do, or because of the size of their economy in general. The larger economies in the world may influence the financial markets in a big way. Here are some of the largest economies in 2016 whose overall health can impact others.
Market Moving Economies
No. 1 United States of America
In the top spot is the USA with the largest economy. As of 2016, it has a GDP of $18.5 trillion, about 25% of the gross world product. While China has a larger GDP, has greater purchasing power parity (PPP) which is $57,294, compared to China’s $15,423.
No. 2 The European Union
Though it is the second largest economy in the world, it stands out as it incorporates a number of countries. The region’s GDP is a little over €16.5 trillion and its currency, the euro, is the second most traded currency, after the US dollar. Europe’s main stock exchange is the Euronext, the 7th biggest in the world and it’s economy is based on the free market principles.
No. 3 The Republic of China
China recently opened their markets to the world and with a large manufacturing and export arms, it is the second largest single economy worldwide. GDP sits at $21.3 trillion, and the economy has been growing over 7% in recent years. Though their economy is slowing with GDP growth dropping to 6.5% it is still above most others in terms of percentage growth and its overall massive size.
No. 4 Japan
The ‘land of the rising sun’ sits at the number four spot though only for nominal GDP (not including PPP). Japan’s economy has suffered since the 2008 crisis and has continued to feel the strain of a weak yen and below-zero bond yields. The central bank has tried a number of stimulus packages with patchy results and only in 2016 did they start to see positive growth if only just over 0.5%.
No. 5 Federal Republic of Germany
Its lucrative automotive industry has seen Germany become Europe’s largest economy. With large exports in machinery and chemicals, it is by far the strongest nation in the EU and the fifth strongest in the world. It faces a number of key challenges with the status of the EU under the spotlight. But with the economy growing 1-2% annually there is, at the time of writing, nothing to stop it from continuing to grow.
No. 6 The United Kingdom
At the number six slot we have the UK with a GDP of $2.65 trillion. While not a big manufacturing nation, over 75% of the economy is based on services. Its domestic agriculture, while not a large export, does produce 60% of its food needs internally using just 2% of its labour force. However, with the Brexit ahead, analysts have predicted anything between a 2-10% drop in GDP.