The UK’s Place in the World

Ever since I taught Economics I have had an interest in economic stats and international comparisons. All too often we hear from some people that the UK is a small island and that we no longer count in the world. Nothing could be further from the truth. Whilst the UK is no longer the biggest economy in the world (and hasn’t been for some time) we are still number 6 in the world and may overtake France for the number 5 spot. It would also not take very many years to outstrip Germany and indeed our per capita wealth ($38,360) is currently greater than Germany ($37,680).

China is of course powering up the international rankings with annual growth rates of 10%+ in recent years. Even this year with a reduced growth rate, it is expected to achieve growth of 8.4%. India is also growing rapidly and rising up the economic league table. This year it is likely to overtake Italy. The other two countries which comprise the so-called BRICs i.e. Brazil and Russia are not growing at the same rate but are still (more slowly) climbing up the table. The UK Coalition government has (rightly in my view) made it a priority to improve trading links with the BRIC countries.

Whilst China is undoubtedly growing apace it will be many years before she can overhaul the USA. The USA has been a dynamic economy for decades but is increasingly burdened by debt, which can only continue to be financed as long as the US Dollar remains the world’s investment currency of choice. China’s growth rate is likely to slow as it moves from rapid industrialisation to developing its service sector and higher value-added manufacturing industry. Its workers are also beginning to demand better standards of living which will raise the country’s cost-base relative to the West.

Here are the statistics for the top 20 world economies. The number in brackets is the population and the following figure is the US Dollar denominated Gross Domestic Product (GDP) figure for 2011, according to the respected Economist magazine:

1. USA (312.3m) – $14,996bn
2. China (1,345.7m) – $6,460bn
3. Japan (126.5m) – $5,621bn
4. Germany (83.0m) – $3,127bn
5. France (63.2m) – $2,490bn
6. UK (62.7m) – $2,403bn
7. Brazil (194.9m) – $2,052bn
8. Italy (60.3m) – $1,888bn
9. India (1,202.1m) – $1,832bn
10. Russia (141.5m) – $1,737bn
11. Canada (34.3m) – $1,616bn
12. Spain (46.1m) – $1,337bn
13. Australia (22.5m) – $1,190bn
14. Mexico (113.8m) – $1,119bn
15. South Korea (49.6m) – $1,094bn
16. Indonesia (245.6m) – $806bn
17. Turkey (74m) – $760bn
18. Netherlands (16.6m) – $743bn
19. Switzerland (7.9m) – $513bn
20. Iran (75.9m) – $488bn

(Source: The Economist)

If readers are interested in the size of any particular country’s economy I would be happy to see if I can find that information. Sometimes it is surprising and reassuring to note that the UK is still one of the biggest economic powers in the World!