Gross domestic product

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In economics, the gross domestic product (GDP) is a measure of the size of the economy of a particular territory.

It is defined as the total value of all goods and services produced within that territory during a specified period (most commonly, per year). GDP differs from gross national product in excluding inter-country income transfers, in effect attributing to a territory the product generated within it rather than the incomes received in it.

A common equation for GDP is:

GDP = consumption + investment + government expenditures + exports - imports

Aggregate expenditures are calculated in a similar way, although the aggregate expenditures formula does not account for unplanned investment (left over inventory at the end of the reporting cycle) and is more commonly used by economic theorists.

GDPs of different countries may be compared by converting their value in national currency according to either (a) exchange rates prevailing on international currency markets, or (b) the purchasing power parity (PPP) of each currency relative to a selected standard (usually the United States dollar).

The relative ranking of countries may differ dramatically between the two approaches, as using official exchange rates can routinely understate the relative effective domestic purchasing power of the average producer or consumer within a less-developed economy by 50-60% owing to the weakness of local currencies on world markets.

On the other hand, comparison based on official exchange rates can offer a better indication of a country's purchasing power on the international market for goods and services.

For more information see measures of national income.

List of the biggest economies

(based on total GDP, PPP basis. All numbers in US Dollars)

  1. European Union 10.84 trillion
  2. United States 10.40 trillion
  3. China (mainland) 5.70 trillion
  4. Japan 3.55 trillion
  5. India 2.66 trillion
  6. Russia 1.35 trillion
  7. Brazil 1.34 trillion
  8. South Korea 931 billion
  9. Canada 923 billion
  10. Mexico 900 billion


(1) Although the European Union is not formally a nation, it is tied together with a single currency (excluding the UK, Sweden and Denmark) and is considered by some to be a single entity.

The methodology for deriving accurate PPP comparisons remains under constant review, and questions have been raised as to whether the relative size of Mainland China's GDP may be overstated to some extent.

List of the total GDP, PPP basis by country

Rank Entity PPP total PPP/capita Population
(U.S dollars) (U.S dollars) (2003 est.)
European Union* 10.84 trillion 28,600 379,000,000
1. United States 10.40 trillion 37,600 290,343,000
2. China (mainland) 5.70 trillion 4,400 1,287,000,000
3. Japan 3.55 trillion 28,000 127,215,000
4. India 2.66 trillion 2,540 1,049,701,000
5. Germany 2.18 trillion 26,600 82,399,000
6. France 1.54 trillion 25,700 60,181,000
7. United Kingdom 1.52 trillion 25,300 60,095,000
8. Italy 1.44 trillion 25,000 57,998,000
9. Russia 1.35 trillion 9,300 144,526,000
10. Brazil 1.34 trillion 7,600 182,032,000
11. South Korea 931 billion 19,400 48,249,000
12. Canada 923 billion 29,400 32,207,000
13. Mexico 900 billion 9,000 104,908,000
14. Spain 828 billion 20,700 40,218,000
15. Indonesia 663 billion 3,100 234,894,000
16. Australia 528 billion 27,000 19,732,000
17. Turkey 468 billion 7,000 68,110,000
18. Iran 456 billion 7,000 68,279,000
19. Netherlands 434 billion 26,900 16,151,000
20. South Africa 432 billion 10,000 42,769,000
21. Thailand 429 billion 6,900 70,000,000
22. Taiwan (ROC) 406 billion 18,000 22,116,000
23 . Argentina 391 billion 10,200 38,000,000
24. Poland 368 billion 9,500 38,000,000

Source: CIA World Factbook: PPP, PPP/Capita, Population

List of total GDP

Total GDP 2002 (millions of Ranking Economy US dollars), (i.e. no PPP as in the list above)

European Union 8,562,793 (Sum of GDP of 15 memberstates, using same source as for list below. The difference comes from the currency rates fluctuations. The value for 2003 is more than 10,600,000)

  1. USD 10,416,818 -- United States
  2. USD 3,978,782 -- Japan
  3. USD 1,976,240 -- Germany
  4. USD 1,552,437 -- United Kingdom
  5. USD 1,409,604 -- France
  6. USD 1,237,145 -- China
  7. USD 1,180,921 -- Italy
  8. USD 715,692 -- Canada
  9. USD 649,792 -- Spain
  10. USD 637,205 -- Mexico
  11. USD 515,012 -- India
  12. USD 476,690 -- South Korea
  13. USD 452,387 -- Brazil
  14. USD 413,741 -- Netherlands
  15. USD 410,590 -- Australia
  16. USD 346,520 -- Russian Federation
  17. USD 268,041 -- Switzerland
  18. USD 247,634 -- Belgium
  19. USD 229,772 -- Sweden
  20. USD 202,954 -- Austria
  21. USD 189,436 -- Norway
  22. USD 187,860 -- Poland

Source: Worldbank

This ranking is different to the previous as it is based on the currency exchange rate and not on the PPP.

See also

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