Traders should keep a close eye on economic performance in many countries. Before taking an active part in trading in the financial markets, it makes sense to get acquainted with the main economies of the world. By doing fundamental analysis and research, you will learn where to find sources of economic data for major economies and begin to understand various economic indicators.
IMF Economic Indicators for the World's Major Economies
As a particularly rich source of information for traders who wish to incorporate some form of economic analysis into their trading plans, the International Monetary Fund or the IMF provides an extensive database of international economic data available free of charge on its official website - https://www. imf.org/en/Publications/WEO.
The IMF usually updates its database in April and then in September or October each year.
Traders can use this database to get information for most of the world's major economies. Including for indicators related to: overall economic growth, growing budget deficit, employment, inflation, balance of payments, trade balances, fiscal indicators, interest rates and commodity prices.
The IMF provides its historical data from 1980 to the present. In addition, forecasts for each type of data are provided for the next two years and even longer for certain key indicators. The IMF, however, warns that its data for some countries may be incomplete.
Ranking of world economies by growth
The most common standards for measuring economic performance typically include the use of various growth metrics. In most cases, either nominal gross domestic product or GDP or GDP at purchasing power parity or PPP will be used for economic comparison purposes . Both of these indicators are expressed in monetary terms. Usually the amount will be converted to US dollars if comparisons are made between countries or individual regions.
Nominal GDP is the final market value of all goods and services that are produced by a particular country or region in a given period. The observation period will usually be quarterly or annual.
Estimates of nominal GDP are often used to assess the economic performance of a particular country, region, or economic bloc, and are often useful in making quantitative comparisons between the economies of different countries and regions.
It is convenient to view GDP data for individual countries on the website - https://ru.tradingeconomics.com/country-list/gdp.
Since nominal GDP does not reflect differences observed in the cost of living or inflation rates observed across countries, some analysts prefer to use a measure of GDP that includes purchasing power parity or PPP per capita instead.
PPP GDP is generally a more useful economic measure when comparing differences in living standards observed between different countries and geographic regions. Also, by using PPP GDP as a measure of economic ranking, it tends to rank less developed countries higher than highly developed countries.
The relationship between trade and the country's economy is also very important. In one study on the importance of trade to the economy, Trade and Economic Growth: Rethinking the Empirical Evidence, researchers Matthias Busse and Jens Koeniger found that "the volume of exports and imports as a share of total GDP" had a "positive and very significant effect on the economic height".
GDP PPP data is available on Wikipedia - https://ru.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)#cite_note-4.
Global Economic Growth Study
Organizations such as the World Bank monitor and forecast the growth of the world economy, as well as the growth rates in various economic regions. The World Bank provides expert forecasts regarding the future growth of the global economy, which traders can use to predict long-term market trends.
World Bank projections include: advanced economies, high-income countries, developing countries, low-income countries, emerging market and developing countries or EMDE countries, and BRICS countries consisting of Brazil, Russia India, China and South Africa.
In addition, the World Bank also provides a breakdown of economic growth data and projections by region. Regional economies for which World Bank forecasts currently exist include: Europe and Central Asia, Latin America and the Caribbean, the Middle East and North Africa, Sub-Saharan Africa, East Asia and the Pacific, and South Asia.
You can study all this data on the World Bank website - https://www.worldbank.org/en/publication/global-economic-prospects.
Top 10 countries in the world by nominal GDP
The global economy has a particularly unequal distribution of income, which can be discerned from the gross domestic products of the top ten economies. The GDP of these ten economies accounts for two-thirds of the global economy, and the fifteen largest economies account for three-quarters. The remaining 172 countries make up only 25 percent of the global economy.
The following list ranks every major economy in the world in terms of nominal GDP. These ratings are based on the World Economic Outlook database maintained by the International Monetary Fund or the IMF.
USA
In terms of nominal GDP, the United States economy is the largest in the world.
The US economy represents a whopping 24.5 percent of the world's gross domestic product, and many traders are closely watching US economic growth as an indicator of future trends in currency pairs, including the US dollar.
While the United States is a particularly advanced economy rich in resources and technology, its number one position in terms of GDP is surpassed by China when GDP is measured in terms of purchasing power parity.
China
The Chinese economy has completely transformed from a centrally planned closed economy in the 1970s to a powerful export and manufacturing base today. The economy in China is equally represented by 45 percent in the manufacturing sector and 45 percent in the service sector. Although the US is ahead of the PPP in terms of GDP, it continues to lag behind the US in terms of nominal GDP.
Japan
Japan's economy ranks third on the list, however it falls to fourth place when measured in purchasing power parity. Japan's economy has been in recession since 2008 and has yet to recover from the massive earthquake and tsunami that hit the island nation in 2011.
While economic growth has been between +0.5% and +2.0% in the last few years, an economy of $4.12 trillion is projected. dollars will rise by less than 1% over the next six years.
Germany
The German economy is best known for its exports of vehicles, machinery, chemicals and home appliances. Despite a skilled workforce, the recent influx of immigrants has created a number of demographic challenges for the entire region's economy.
The size of the German economy at purchasing power parity is $3.84 trillion and nominal GDP is $3.36 trillion. Germany's GDP per capita is $46,893 and the economy is projected to grow between one and two percent over the next few years.
Great Britain
Most of the UK economy is in services, which account for up to 75 percent of the country's GDP. While agriculture brings only one percent.
Although the agricultural segment provides only one percent of GDP, it provides 60 percent of domestic food needs, while employing only two percent of the country's workforce. The UK economy is currently in uncertain post-Brexit territory.
The Brexit results have led economists to estimate that the economy could contract between -2.2% and -9.5% of GDP, depending on how trade agreements are implemented to replace the current market structure.
France
The country's low poverty rate and high standard of living can be seen in the PPP per capita GDP of $41,180. France is one of the world's largest exporters and importers of goods, but it has come under severe pressure in the past few years.
France is currently struggling with high unemployment. The unemployment rate in 2015 reached 10.35 percent. According to the International Monetary Fund, France's GDP is expected to increase and the unemployment rate to fall over the next six years.
India
Due to the country's high population, GDP per capita is only $6,162.
The country is still dependent on the agricultural segment with 17 percent of GDP, significantly higher than in more developed countries. The service sector has grown significantly to 57 percent of GDP, and industry to 26 percent.
India's favorable demographics and limited dependence on exports, as well as high savings rates and a growing middle class, have led India to overtake China as the world's fastest growing economy.
Italy
Italy continues to be one of the largest economies in the Eurozone. The economy is facing a number of headwinds, including high unemployment and a massive public debt of 135.8 percent of GDP.
In addition, the country's banking system is on the verge of collapse. Nevertheless, the country experienced positive economic growth in 2015. At purchasing power parity, Italy's GDP is valued at US$2.17 trillion, with a GDP per capita (PPP) of US$35,708.
Brazil
The ninth-largest economy by nominal GDP ran into serious trouble in 2015, falling into recession and falling from seventh to ninth on the list. The $1.77 trillion economy has the service sector with the highest contribution rate, at 68 percent. Manufacturing contributes 26 percent and agriculture six percent.
The 2015 recession sent the economy down 3.8 percent with negative growth, with no positive growth prospects for the IMF until 2018. The unemployment rate is expected to reach 10.4 percent over the same time period. Brazil's GDP at purchasing power parity is $3.19 trillion and its GDP per capita (PPP) is $15,614.
Canada
Canada overtook Russia - by $1.32 trillion - in tenth place on the list. The Canadian economy is largely service-oriented and heavily influenced by commodity and oil prices.
The recent decline in oil prices limited Canada's economic growth to just +1.2 percent in 2015, compared with +2.5 percent in 2014. The GDP at purchasing power parity is $1.6 trillion and the GDP per capita (PPP) is $45.553.