10 countries with largest foreign reserves

Foreign exchange reserves, often taken as a yardstick to gauge a country's financial strength, are the foreign currency deposits and bonds held by central banks or monetary authorities (it is the Reserve Bank in the case of India).

Forex reserves include a country's gold holdings and convertible foreign currencies held in its banks, including special drawing rights and exchange reserve balances, with the International Monetary Fund. Foreign exchange reserves are used to back a country's liabilities, e.g. the local currency issued and the various bank reserves deposited with the central bank, by the government or financial institutions.

The quantity of foreign exchange reserves can change as and when a country's central bank implements the monetary policy. Large reserves of foreign currency allow a government to manipulate exchange rates -- to stabilise the foreign exchange rates to create a favourable economic environment.

India ranks 5th in the world with a foreign exchange reserves of $262 billion as of June 2009.

So let's find out which are the 10 nations with the largest foreign exchange reserves in 2009...

Rank 1: People's Republic of China -- $2.132 trillion

People's Republic of China is the largest country in East Asia and the most populous in the world with over 1.3 billion people, approximately one-fifth of the world's population.

China is the fastest growing major economy in the world. It now has the world's third largest nominal GDP -- 30 trillion yuan ($4.4 trillion). It is a member of the World Trade Organization and is the world's third largest trading power behind the US and Germany.

Analysing China's record foreign exchange reserves growth, economists discovered that luxury home sales in China's big cities saw robust growth in the second quarter. According to analysts, it is mainly because of increased purchase by overseas buyers.

Rank 2: Japan -- $1.019 trillion

Japan is the second largest economy in the world, after the United States, with about $5 trillion nominal GDP and third after the US and China in terms of purchasing power parity.

It is home to some of the leading and most technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles and processed foods.

Japan's main export markets are the US, European Union, China, South Korea, Taiwan and Hong Kong. Japan's main exports are transportation equipment, motor vehicles, electronics, electrical machinery and chemicals.

The island country's service sector accounts for three quarters of the gross domestic product. Japan ranks 12th out of 178 countries in the Ease of Doing Business Index 2008.

Rank 3: Russia -- $401 billion

Russia has the world's largest reserves of mineral and energy resources,and is considered an energy superpower. It has the world's largest forest reserves, too.

It is the world's leading natural gas exporter and the second leading oil exporter.

The economic crisis that struck all post-Soviet countries in the 1990s was almost twice as intense as the Great Depression that hit Western Europe and the US in the 1930s. Russia's GDP was half of what it had been in the early 1990s, even before the financial crisis of 1998 had set in.

However, since the turn of the century, rising oil prices, increased foreign investment, higher domestic consumption and greater political stability have bolstered economic growth in Russia.

The country ended 2007 with its ninth straight year of growth, averaging 7 per cent annually since the financial crisis of 1998.

Rank 4: Taiwan -- $305 billion

Taiwan's rapid economic growth post World War II has transformed it into an advanced economy. Taiwan's growth is fondly referred to as the 'Taiwan Miracle'.

International Monetary Fund recognises Taiwan as an advanced economy while World Bank terms it high-income economy. Its technology industry has a major role to play in the global economy.

Taiwanese companies manufacture a large proportion of the world's consumer electronics.

Taiwan is one of the constituent of Four Asian Tigers alongside Singapore, South Korea and Hong Kong.

Today Taiwan has a dynamic capitalist, export-driven economy with gradually decreasing state involvement in investment and foreign trade.

Rank 5: India -- $262 billion


India is the seventh-largest country by geographical area, second-most populous country and the most populous democracy in the world.

India's economy is among the fastest growing in the world. It has the world's second largest labour force -- 516.3 million. In terms of output, the agricultural sector accounts for 28 per cent of GDP; the service and industrial sectors make up 54 per cent and 18 per cent respectively.

The International Monetary Fund recently raised India's growth forecast to 5.4 per cent for 2009 and said that the Indian economy is beginning to pull out of a recession.

The country is expected to witness a growth rate of 5.4 per cent in 2009.

The Indian economy is projected to expand at a rate of 6.5 per cent in 2010 while the world GDP is anticipated to grow by 2.5 per cent.

The country is well connected through maritime routes, although it lacks in airports and high-quality roads
Rank 6: South Korea -- $232 billion

South Korea, officially the Republic of Korea, is an East Asian country, located on the southern half of the Korean Peninsula.

South Korea is a presidential republic consisting of 16 administrative divisions.

South Korea is a developed country and a full democracy. It is a high-income Organisation for Economic Co-operation and Development member, having the fourth largest economy in Asia and the 15th largest in the world.

South Korea is a leader in technologically advanced goods such as electronics, automobiles, ships, machinery, petrochemicals and robotics, headed by Samsung, LG and Hyundai-Kia.

South Korea had the world's second-fastest growing economy from 1960 to 1990. However, from 2003 to 2008, South Korea's economic growth rate slowed to fall behind the global average.

The economy slipped from the 11th largest in the world to the 15th largest.

South Korea is classified as a high-income economy by the World Bank and an advanced economy by the International Monetary Fund.
Rank 7: Brazil -- $210 billion

The Federative Republic of Brazil is a country in South America. It is the fifth largest country by geographical area, occupying nearly half of South America.

Brazil is the largest national economy in Latin America, the world's 10th largest economy at market exchange rates and the ninth largest in purchasing power parity, according to the International Monetary Fund and the World Bank.

The country has been expanding its presence in international financial and commodities markets, and is regarded as one of the group of four emerging economies called BRIC (Brazil, Russia, Indian and China).

The country is known for its booming agricultural, mining, manufacturing and service sectors, as well as a large labour pool.

Brazilian exports are currently scaling new heights, its major export products being aircraft, coffee, automobiles, soybean, iron ore, orange juice, steel, ethanol, textiles, footwear, corned beef and electrical equipment.

Rank 8: Hong Kong -- $186 billion

Hong Kong, a self-governing territory of the People's Republic of China, is a global metropolitan and international financial centre, and has a highly developed capitalist economy.

Its highly capitalist economy has been ranked the freest in the world by the Index of Economic Freedom for 15 consecutive years.

Hong Kong is one of the world's leading financial centres and is one of the Four Asian Tigers. The Hong Kong Stock Exchange is the sixth largest in the world.

Hong Kong's economy was affected by the Asian financial crisis of 1997. The dangerous H5N1 avian influenza also surfaced that year.

After a slow recovery, Hong Kong suffered a setback again because of an outbreak of SARS in 2003.

However, today, Hong Kong continues to serve as an important global financial centre. The Hong Kong dollar has been pegged to the US dollar since 1983.

Rank 9: Singapore -- $166 billion

The Republic of Singapore is an island city-state located at the southern tip of the Malay Peninsula.

Since its independence on August 9, 1965, Singapore's standard of living has risen significantly.

Singapore's is an export driven economy and is one of the Four Asian Tigers along with Hong Kong, South Korea and Taiwan.

It happens to be the 5th wealthiest country in the world in terms of GDP per capita.

Foreign direct investment and industrialisation have created a robust economy focused on industry, education and urban planning.

In 2009, the Economist Intelligence Unit ranked Singapore the 10th most expensive city in the world and third in Asia, after Tokyo and Osaka.

The current economic crisis, however, has affected the economy of this island nation to a great extent

Rank 10: Germany -- $144 billion

The Federal Republic of Germany consists of 16 states. The capital and largest city is Berlin.

Germany is a major economic power with the world's fourth largest economy by GDP and the fifth largest in purchasing power parity.

Germany allocates the second biggest annual budget of development aid in the world.

Germany is the world's top exporter and is the leading producer of wind turbines and solar power technology in the world.

The largest annual international trade congresses are held in German cities of Hanover, Frankfurt, and Berlin.

Of the world's 500 largest stock market listed companies measured by revenue, the Fortune Global 500, 37 companies are headquartered in Germany. Some of them are: Daimler, Volkswagen, Allianz, Siemens, Deutsche Bank etc.

Germany is also home to well known global brands like Mercedes Benz, SAP, BMW, Adidas, Audi, Porsche, Volkswagen, and Nivea.

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World's top 10 buyers & producers of gold

Gold has held mankind enraptured since time immemorial. It has been prized for its beauty, easy workability, indestructibility, and value.
The average global demand for gold in the past 10 years has been mainly for jewellery at 76 per cent, followed by industrial applications of 14 per cent and 10 per cent for investors. The available gold supply is from new mining, reclaimed scrap, official or new bank sales and gold loans made from official reserves.
There are five international gold trading centres: New York, London, Zurich, Tokyo and Hong Kong.
But who are the world's largest buyers and producers of gold?
India, world's number one buyer of gold!
The craze for the yellow metal in India is phenomenal. It has traditionally been the world's largest consumer of gold. India buys an average of 800 tonnes of gold every year and its total jewellery market is worth more than $20 billion.
However, in recent times the demand for gold in India has waned slightly, with the price of the precious metal zooming to record highs. Yet, the country remains the largest buyer of gold, at 770 tonnes in 2007.
China: 2nd largest buyer; number one producer
Beijing has gold holdings of 1,054 tons, up from 600 tons in 2002, and still wants to buy more gold.
China produced 280.5 tons of gold in 2007, making it the world's number one producer of the precious metal.
China is also the world's second largest buyer of gold. It bought 328 tons of gold in 2007.
USA: 3rd largest buyer; 4th largest producer
The United States of America is the world's third highest buyer of gold. In 2007, it purchased 275 tons of the yellow metal.
However, the US is also the world's fourth largest producer of gold. In 2007, it produced 240 tons of gold.
Turkey: 4th largest buyer
Turkey is the world's fourth largest buyer of gold. In 2007, it bought 250 tons of the precious metal.
Saudi Arabia: 5th largest buyer
Saudi Arabia purchased tons of gold in 2007, making it the world's fifth largest buyer of gold.
UAE: 6th largest buyer
The United Arab Emirates is the sixth largest gold-buyer at 107.2 tons (figures pertain to 2007).
Russia: 7th largest buyer; 6th largest producer
The world's seventh largest buyer of gold is Russia. In 2007, Moscow procured 85.6 tons of gold.
Russia is also a big producer of gold. In fact, it is the world's sixth largest gold-producer. In 2007, it produced 169.2 tons of gold.
Vietnam: 8th largest buyer
Vietnam bought 77.5 tons of gold in 2007, making it the world's eighth largest gold-buyer.
Egypt: 9th largest buyer
Egypt follows in the ninth position. In 2007, it procured 69 tons of gold making it one of the biggest gold-buyers in the world.
Italy: 10th largest buyer
Italy is the tenth largest buyer of gold in the world. In 2007, it purchased 59.2 tons of the yellow metal.
South Africa: 2nd largest producer
South Africa is the world's second largest producer of gold after China. In 2007, it produced 270 tons of gold.
Australia: 3rd largest producer
Australia is the world's third largest producer of gold. In 2007, it produced 246.3 tons of gold.
Peru: 5th largest producer
Peru produced 170 tons of gold in 2007, making it the world's fifth largest producer of gold. The United States is the world's fourth largest gold-producer
Indonesia: 7th largest producer
Having produced 146.7 tons of gold in 2007, Indonesia is the world's seventh largest producer of gold. Russia is the world's 6th largest producer of gold.
Canada: 8th largest producer
Canada follows Indonesia in gold production at 101.2 tons (figures pertain to 2007), making it the world's eighth largest producer of gold.
Uzbekistan: 9th largest producer
Uzbekistan is the ninth largest gold-producer in the world. In 2007, it produced 75.3 tons of gold.
Ghana: 10th largest producer
At 75 tons of gold production in 2007, Ghana is marginally behind Uzbekistan. Ghana is the world's tenth largest producer of gold.

Source

Oil for money, China style

Oil deal between China and Brazil’s Petrobras and Russia’s Rosneft and Transneft, ensure supply of oil for China in exchange for liberal amounts of money to help develop hydrocarbon finds in the two countries.
What happens when cash-strapped oil companies and cash-rich countries meet? It doesn’t take much imagination to realize that innovative deal-making is the likely result.
The cash-rich country in question is China and the companies in adversity are Brazil’s Petrobras and Russia’s Rosneft and Transneft. The deals will ensure supply of oil over the next two decades for China in exchange for liberal amounts of money to help develop hydrocarbon finds in the two countries. What is interesting about these deals is that they are not only about securing oil rights, but that they make innovative use of adverse economic conditions to advance China’s long-term interests.
As reported by the Financial Times, China signed a landmark deal with Brazil’s state-owned oil company, Petrobras, on Thursday. Under the deal, Petrobras will get $10 billion to develop oil finds and, in exchange, will supply 100,000-160,000 barrels of oil a day to Unipec Asia, a subsidiary of China Petroleum and Chemical Corp. (Sinopec). It will also supply oil to another Chinese company, PetroChina.
Last week, on Tuesday, China Development Bank signed a $25 billion deal with Russian oil company Rosneft and monopoly oil pipeline operator Transneft for supply of oil from east Siberian oilfields.
These deals are innovative, for they solve two problems in one go. On the one hand, they provide cash to companies that otherwise have few options to secure it from global financial markets. On the other, they secure hydrocarbon resources for China by a different route. Instead of such resources being bid up in a competitive process with many players trying to garner them, the deals have occurred in a barter-like fashion.
To be sure, this sort of deal-making is unusual. More than anything else, it requires a virtual freeze in the world’s financial markets so that efficient allocation of resources becomes difficult, if not impossible.
At the same time, the equation was completed by China’s future needs. China’s actions are consistent with its medium and long-term energy security requirements. In 2006, its reserves-to-production (RPR) ratio for oil stood at 11.6 years. In 2007, this dipped slightly to 11.34 years. Thus, it makes good sense for China to firm up supply contracts of the kind it signed with Brazil and Russia. These will ensure that it faces no discontinuity or demand-supply mismatch in the years to come.
The question to be asked is why India, which also has a tidy pile of cash, did not make use of this opportunity as China did.
Source

Counting the poor: a poverty of statistics

China, which started at a higher poverty of 60% in 1990 compared with 51% for India in 1990, saw poverty decline to 16% in 2005 compared with 41.6% in 2005 for India.

Last month saw the release of two sets of poverty estimates. The World Bank released poverty estimates based on its recent calculation using updated purchasing power parity, or PPP, estimates. The second estimate released a day later by the Asian Development Bank, or ADB, used the same set of data but different poverty line and PPP deflators than the ones used by the World Bank.

Both studies used National Sample Survey Organisation, or NSSO, consumption expenditure surveys but arrived at different estimates of poverty for India. By the World Bank poverty line of $1.25 (Rs56.13) per day, the estimated number of poor in India in 2004-05 was 456 million, 41.6% of the population. Using the $1.35 per day Asian poverty line of ADB, the number of poor in India is 622 million, which is 54.8% of the population. The third estimate is our own official poverty estimate by the Planning Commission for 2004-05, which is 27.5% of the population, or 301 million.
Needless to say, these large differences in poverty estimates for the same country in the same year are a reflection of the poverty of statistics rather than the statistics of poverty. The poverty of official statistics is not only inherent in the way PPP estimates are calculated that yield different deflators, but also in the way international poverty lines are calculated.
The real difference in these numbers that vary from 27.5% to 54.8% lies in the way we characterize the poor. This essentially requires setting a poverty line which demarcates the poor from the non-poor. It is here that the three methods differ.
For the international poverty lines, matters are further complicated by the choice of PPP deflators used to convert national currencies to internationally agreed currencies such as the US dollar. Compared with the previous set of poverty estimates from the World Bank which were based on the $1 a day poverty line, the new estimates differ on two counts. The first is the incorporation of recently updated PPP deflators based on new price data from the international comparison programme that monitors prices of commodity bundles across countries. The second is the choice of poverty line, which is now anchored on the basis of 15 poorest countries in the world, most of which are in Africa.
The change in methodology as far as ADB poverty estimates are concerned is again two fold. The first is the choice of PPP deflators that are taken for commodity bundles weighted by consumption patterns of the class of people who are closer to poverty line, rather than the entire population. Secondly, the Asian poverty line is derived from national poverty lines of Asian countries.
The net change is that the Asian poverty line of $1.35 per day is higher than the World Bank poverty line of $1.25 per day. Moreover, because the PPP deflator used is suitably weighted for consumption of people around the poverty line, ADB estimates are almost 13% higher than the World Bank poverty estimates.
Both these international set of poverty lines suggest a much larger magnitude of poor people in the country than the official estimate of poverty suggested by the Planning Commission. But why do these poverty estimates show higher estimates of poor than the official estimates?
The PPP deflator part may not be the real culprit in this case. The real culprit in this case is our own poverty line which is pegged at a lower level than the poverty line of poorest 15 countries.
The discrepancies in the present set of poverty lines in the official poverty estimation methodology have been highlighted by a number of academic papers in the recent past. Apart from being too low, these also suffer from various other problems such as inter-state price differentials and rural-urban price differentials. Acknowledging these, the government has also set up a new expert group under the chairmanship of S.D. Tendulkar to suggest a suitable poverty line.
However, quarrelling on the actual estimate of poor in the country may be secondary to the important message coming from these poverty comparisons. This is particularly relevant for the two largest countries that are also the fastest growing, India and China.
China, which started at a higher poverty of 60% in 1990 compared with 51% for India in 1990, saw poverty decline to 16% in 2005 compared with 41.6% in 2005 for India. That is, in the last 15 years while China managed to reduce the number of poor by 475 million, the number of poor in India actually increased by 20 million. This is despite the fact that growth rate of Chinese economy is only marginally higher than the growth rate of Indian economy.
This is also the message from ADB poverty estimates. Despite the high growth rate of Indian economy in the recent past, India has the second highest poverty—after Nepal—among all Asian countries.
Clearly, growth alone may not be the best antidote for poverty reduction, at least not in the Indian context.

Source

Why India might overtake China

It has only been a few years since Asia bulls have been touting the arrival of the Chinese Century, citing that nation's enormous potential.
Now, get ready for predictions of the India Century.
That, in fact, was the title of a recent white paper by the Chicago-based consultancy Keystone-India, founded by a group of top economists from Ernst & Young who believe that India is on track to surpass China in growth. "We believe this is India's moment," declares Keystone Chief Economist William T Wilson.
China has a two decade-long track record of 9.5% average annual growth, exports 10 times as much as India, and dwarfs India as a magnet for foreign investment.
By contrast, India has achieved an annual growth rate of 7% or higher only seven times in the past two decades. And largely because of its unruly politics and stifling bureaucracy, it wasn't long ago that economists bemoaned the "Hindu growth rate," implying the nation is simply culturally incapable of achieving high growth.
Even under Keystone's projections, India wouldn't match China's current hypergrowth rates for at least another 15 years. And even by 2050, China's economy would be bigger measured in US dollars.
But longer term, Keystone contends India will be in a stronger position. It projects that China's average annual growth will peak at 8.8 per cent over the next five years, and then gradually trend downward to under 7 per cent in the 2020s and around 4% by the 2040s.
India's annual growth is projected to rise to around 7.3 per cent by 2010 and stay over 7 per cent until the mid-2030s, and still be in the 6% range until 2050.
What's more, Wilson contends that Keystone's forecasts are conservative.
Demographics
The biggest reason India has more long-term growth potential is simply that its population is younger and is growing more quickly than China's. Currently, China has 300 million more people than India.
But because of its very low birth rate, largely due to the one-child policy, China's population is expected to peak at around 1.45 billion by 2030.
India's population is expected to increase by 350 million by 2030, more new people than the US, Western Europe, and China combined. India will have 200 million more people than China by midcentury.
What's more, China's population is aging rapidly. As a result, the number of working-age Chinese is projected to peak in 2020 and start declining steadily thereafter, while India's workforce will keep growing for at least four more decades.
However, India's fertility rate also is declining, meaning future families will have fewer children to support and more to spend on consumption.
Development experts call this combination of a growing workforce and declining fertility a 'demographic dividend,' which helped power explosive economic growth in East Asia's Tiger economies from the 1960s through the early 1990s.
Capital Efficiency
The big driver of China's economic growth has been massive investment, equal to 40% to 45% of gross domestic product a year, an extraordinarily high rate on world standards�and twice the percentage of India's.
In 2004, investment in China was equal to half of its $1.5 trillion in GDP. In that context, China's 9.5% growth rate that year shouldn't be too surprising.
"It is staggering how much investment was needed to power Chinese growth in recent years," Wilson notes. "Any nation investing half of GDP in fixed-capital income looks a lot like pre-crisis Asia."
India, however, gets much more bang for the rupee. It has achieved 6% average growth with an investment rate half that of China's, around 22% to 23% a year.
Investment Growth
Many signs point to big increases in investment in India, Wilson says.
In fact, he estimates investment in India could reach 35% of GDP within a decade, which would enable it to match China's 9% plus growth. One reason is that the savings rate in India rose from 23.5% of GDP in 2001 to 28.1% in 2004.
And because of its growing workforce and the decline in family size, India's savings rate should continue to rise to a projected 37% in 20 years.
Since investment is highly correlated to domestic savings, that should translate into higher investment and economic growth.
Meanwhile, the rapidly aging population of China means that its savings rate also is likely to drop in the future, as it has in most other nations with graying workforces.
Second, India thus far has gotten by with minimal foreign investment. Keystone notes that in the past four years alone, China has drawn $200 billion more in foreign investment.
However, India is planning to open up many long-protected sectors that have great allure to foreign investors and that could draw huge inflows of money.
They include telecom, where Indian demand now is growing even faster than China's, commercial real estate, and department stores. Although some of the reforms have stalled recently due to domestic political opposition, Wilson believes the government will prevail.
"If you look at the institutional changes and the number of industries that have liberalised over the past five years, the pace has been phenomenal,he says.
Wilson predicts India's real estate sector will draw a huge influx of money from foreign hedge funds, and liberalisation of retail will be 'the real big bang' for the economy.
New Entrepreneurs
Indian industry so far has been led by many of the big business families and conglomerates that dominated when India was still a quasi-socialist, heavily regulated economy.
They generally have done a good job of taking advantage of new opportunities offered by liberalization since the early 1990s. But the more dynamic companies in India are smaller ones that are led by new generations of entrepreneurs who take greater risks or are more connected to the global economy.
These new companies also have more creative managers, argues Debashis Ghosh, another Keystone partner who worked at Ernst & Young.
Keystone focuses on researching mid-sized Indian companies with $10 million to $100 million in annual sales.
"The bigger companies are still led by oldschool types who used to depend on access to government and got huge when there was nobody else in the game.
"Because they had scale, foreigners had to deal with them," says Ghosh.
"Now, though, the top talent from the Indian Institutes of Technology and the Indian Institutes of Management are flowing into the mid-sized sector. That is like getting a management team of all Wharton and Massachusetts Institute of Technology grads."
As a result, he contends that the Indian companies of the future are more dynamic than those of China, where management tends to be weak.
Higher Productivity
India has averaged respectable productivity growth of 2.5% a year over the past two decades. But that can grow sharply, thanks to liberalization of many industries, a literacy rate that has risen from 18% in 1951 to 65% now, and India's rising openness to foreign trade, which has jumped from 15% of GDP in 1991 to 26% now.
Manufacturing Surge China dwarfs India as a manufacturing power, especially for export.
And it will be a long time before India, with its inadequate infrastructure and components supply base, will be a serious export rival. But in recent years, India's domestic manufacturing industry has been growing strongly.
What's more, a number of Indian companies are especially strong in high-end manufacturing, such as auto parts, power generators, and medical equipment, that requires a lot of engineering.
In terms of quality and efficiency, several Indian auto parts companies are on par with the US.
"If you look at engineering work across the board, in industries from pharmaceuticals to telecom, what India is doing is an order of magnitude beyond what China is doing," says Keystone's Ghosh.
Anyone who visits both countries today may find it hard to imagine India overtaking China in economic performance.
But when you look at the fundamental drivers�growth in the workforce, fixed investment, and productivity -- over the long run the prospect looks a lot more plausible.

Courtsey:Specials.rediff.com

Excerpted from: Chindia-How China and India are Revolutionizing Global Business by Pete Engardio

The world's largest economies

India
The Indian economy is the 12th largest in the world. That is, India's gross domestic product stands at $1.171 trillion.
However, in terms of purchasing power parity, India is the world's fourth largest economy. Its GDP in purchasing power parity terms is at $3.092 trillion.
These are the year 2007 figures, recently released by the World Bank.
By definition, purchasing power parity (PPP) is an economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.
India is the one of the world's fastest growing economies, yet its annual per capita income remains quite low at $950, or about Rs 40,000. That puts India in the 160th spot.
Incidentally, World Bank figures show that the world's GDP is at $54.347 trillion. India accounts for just over 2 per cent of global GDP.
1. United States
The American GDP is at $13.812 trillion, making it the world's largest economy. It accounts for more than 25 per cent of the entire world's GDP!
In terms of purchasing power parity too, the United States is the world's leading economy.
However, its per capita income at $46,040, per year, pegs it at the 15th spot in the world.
2. Japan
Japan, with a GDP of $4.377 trillion, is the world's second largest economy.
However, in terms of purchasing power parity, Japan is ranked third by the World Bank. It's GDP in PPP terms is $4.283 trillion.
Japan's per capita income (annual) is $37,670, making it the 25th highest in the world.
3. Germany
Germany is the world's third largest, with its GDP at $3.297 trillion.
But in PPP terms, Germany is the world's fifth largest economy. It's GDP in PPP terms is at $2.752 trillion.
Its per capita income is the 23rd highest in the world, at $38,860.
4. China
China, the Asian giant, is the world's fourth largest economy with a GDP of $3.281 trillion; but in purchasing power parity terms it ranks second at $7.055 trillion.
It is the world's fastest growing major economy and its giant strides have taken the world by a storm. Economists predict that over the next few decades, it could topple the US as the world's largest economy.
China's per capita income, however, is still low at $2,630 per year.
5. United Kingdom
Britain is the world's fifth largest economy. Its GDP is at $2.728 trillion.
In purchasing power parity terms, the United Kingdom's GDP stands at $2.082 trillion making it the seventh largest in the world.
Britain is a rich nation. Its per capita income is at an impressive $42,740. That would rank it in the 19th spot
6. France
The French GDP is at $2.563 trillion, making it the world's sixth largest economy; but in terms of PPP, it is the world's 8th largest (GDP in PPP terms, $2.054 trillion).
The per capita income of the French at $38,500 makes them the 24th richest people in the world.
7. Italy
Italy's GDP in absolute terms is at $2.107 trillion. That makes it the planet's seventh largets economy.
However, in purchasing power parity terms its GDP is at $1.780 trillion and its rank is 10th.
Italians' per capita income is the 30th highest in the world. It is $33,540.
8. Spain
Spain is the eighth largest economy with its GDP at $1.429 trillion. In purchasing power parity, however, it slips to the 11th spot ($1.373 trillion).
With a per capita income of $29,450 per year, its people are the 36th richest in the world.
9. Canada
The Canadian GDP stands at $1.326 trillion, making it the world's ninth largest economy.
In PPP terms, however, it stands 14th in the world. Its GDP in PPP terms is at $1.178 trillion.
Its people enjoy a comfortable life with a per capita income of $39,420, which is 22nd highest in the world.
10. Brazil
The Brazilian economy too has been growing at a scorching pace. It is the world's 10th largest economy with a GDP of $1.314 trillion.
But in terms of purchasing power (GDP - $1.834 trillion), it is better placed at number 9.
Amongst the emerging economies, it has one of the best per capita income figures -- $5,910. This places it in the 85th spot in the world
11. Russian Federation
In absolute GDP terms, Russia -- at $1.291 trillion -- is the world's 11th largest economy., but it jumps to the 6th spot in terms of purchasing power parity ($2.088 trillion).
Its per capita income is at $7,650, the 78th highest in the world.