What Is GDP?
GDP stands for gross domestic product, which is the total value of all of the goods and services produced by the country. GDP per country is primarily used to measure the strength of a country's economy, and is often used in conjunction with GNP/GNI, a related metric. Economists also examine the percentage of GDP change over the years, which can be an indicator of how quickly a country is growing.
Top 10 Countries with the Fastest GDP Growth Rate - World Bank (2021 %):
- Libya — 31.4
- Maldives — 31.0
- Guyana — 19.9
- Macau — 18.0
- Panama — 15.3
- Moldova — 13.9
- Bahamas — 13.7
- Ireland — 13.5
- Peru — 13.3
- Honduras — 12.5
Which Countries Have the Fastest GDP Growth Rate?
As a general rule, the GDPs of developing countries tend to grow more quickly than those of developed or high-income countries because their economies have more room to improve. Once these underdeveloped countries become better able to access their existing resources—by improving their infrastructure or agricultural practices, for instance—their GDP can rapidly improve.
For example, the North African country of Libya has a middle-income economy that is small, but growing quickly, thanks in large part to a booming petroleum industry. China's "Special Administrative Region" Macau is also growing well, although its "growth" is actually recovery—Macau's economy is heavily reliant on tourism and gambling, and its GDP shrank by more than 50% during 2020 due to pandemic-related travel bans. On the other hand, the South American country Guyana's growth is largely due to expansion in the agricultural, mining, and offshore petroleum sectors.
Factors that hinder GDP
Large-scale events can trigger significant shifts in a country's economic production, and by extension, in economic metrics such as GDP, GDP per capita, and GNI per capita. For example, the 2020 COVID-19 pandemic caused a months-long shutdown of most international travel and trade, which had a massive negative impact on the GDPs of countries whose economies relied heavily upon tourism and/or tourism.
Similarly, political unrest, regime changes, and especially armed conflict can wreak havoc on a country's GDP. Countries at war are particularly affected. For example, early estimates from the International Monetary Fund project that the 2022 GDP in Ukraine, which has been mired in conflict with invading Russia for much of the year, will drop to -35%.
Top 10 Countries with the Fastest GDP Growth Rate - International Monetary Fund (April 2022 projections %):*
- Guyana — 47.2
- Macau — 15.5
- Barbados — 11.2
- Saint Kitts and Nevis — 10.0
- Saint Lucia — 9.7
- Iraq — 9.5
- India — 8.2
- Kuwait — 8.2
- Palau — 8.1
- Saudi Arabia — 7.6
*Note: Data above are mid-year projections from the IMF. Actual results, when computed, may differ.
Which Country Has the Largest GDP in the World?
The country with the largest GDP in the world is the United States. Many positive traits enable the U.S. to maintain this position. The United States is a first-world country with a well-developed and innovative infrastructure, for example. It has tremendous natural resources, which enable it to lead the world in both oil production and natural gas production (fortunate, as the U.S. also leads the world in both oil consumption and natural gas consumption. It has huge expanses of arable farmland to grow crops, a strong industrial sector, and a large population of workers who are both hard-working and efficient.
These traits make the U.S. an economic superpower and grant it a tremendous amount of influence over the world’s global economic activity. Moreover, the U.S. is also a military superpower, with one of the largest and most highly funded militaries in the world.
There is some concern that other countries in the world, such as China, could surpass the United States in the future. China has a larger population than the United States and it has developed rapidly during the past few decades, as shown by its world-leading energy consumption (and its consumption of electricity in particular). However, China's quality of life and level of development still fall notably short of those of the United States.
What Contributes to the Growth of GDP?
There are several factors that could play a role in the growth of GDP.
- Access to natural resources — Natural resources are among the most important contributors to GDP growth. Countries that have access to more natural resources are more likely to grow rapidly. For example, many Middle East countries have built their economies around their massive oil reserves.
- A developed infrastructure — Countries with developed infrastructures have an easier time using their resources to produce goods and services.
- A capable and educated workforce — Growing countries require a steady supply of capable workers. This is a growing concern in countries whose birth rates fall below the replacement threshold, or whose educational systems produce too few skilled workers.
- International relations — In most countries, international trade is the main engine for economic growth. The more and better trade agreements a country has established with its neighbors, the more easily it can grow its economy.