Jose Sanchez
Research expert covering society, economy, & politics for Latin America
Global GDP - statistics & facts
The global gross domestic product (GDP) faced a major crisis in 2020 when the COVID-19 pandemic had a massive impact on the global economy, bringing trade to an immediate halt. However, the GDP quickly started increasing again in 2021. What is understood under the concept of GDP, which trends have been observed over the past years, and what do the current forecasts say about the future development of the GDP around the world?
Another notable development is the economic stagnation of some of the world's developed economies. For instance, Japan, the world’s second-largest economy up until 2010, has been struggling with slow and at times even negative economic growth since the early 1990s. The three decades since have thus been dubbed the Lost Decades. Additionally, the largest economy of Europe, Germany, has been struggling with economic stagnation in 2023 and 2024 as the rapid increase in the gas price following Russia’s invasion of Ukraine in 2022 had a highly negative impact on its economy. Prior to the invasion, the German economy relied on imports of cheap natural gas from Russia. Moreover, industrial giants such as Volkswagen have been struggling recently amid high inflation rates, uncertain economic circumstances, and the emergence of new players in the automotive market.
What is GDP?
The term GDP was first developed in the United States in the 1930s, when Simon Kuznets, an American Economist, statistician, and Nobel prize laureate, came up with an idea to assess the size of the economy by combining the financial value of individuals, companies, and the government. After the Bretton Woods conference in 1944, GDP was officially adopted by many financial institutions and regulators as a tool for measuring a country’s economy, and it has become the international standard since the 1990s. At present, GDP is defined as the monetary value of all goods and services produced in a given country or region within a specified time period.The emergence of China as the world's second largest economy
The most notable development regarding GDP during the last decades has been China’s rapid economic growth. Following economic reforms under President Deng Xiaoping in the late 1970s, China emerged from being one of the poorest countries in the world to becoming the second largest economy worldwide in 2010. Today, only the United States has a larger economy in terms of GDP than China.Another notable development is the economic stagnation of some of the world's developed economies. For instance, Japan, the world’s second-largest economy up until 2010, has been struggling with slow and at times even negative economic growth since the early 1990s. The three decades since have thus been dubbed the Lost Decades. Additionally, the largest economy of Europe, Germany, has been struggling with economic stagnation in 2023 and 2024 as the rapid increase in the gas price following Russia’s invasion of Ukraine in 2022 had a highly negative impact on its economy. Prior to the invasion, the German economy relied on imports of cheap natural gas from Russia. Moreover, industrial giants such as Volkswagen have been struggling recently amid high inflation rates, uncertain economic circumstances, and the emergence of new players in the automotive market.
A shift of the global economic balance?
Due to the slow economic growth of the developed economies and rapid growth of developing economies, the BRICS countries (Brazil, China, India, Russia, South Africa, Iran, Indonesia, Egypt, Ethiopia, and the United Arab Emirates) have now overtaken the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) by share of the world’s total GDP. The development is set to continue for the foreseeable future as the GDP growth is forecast to be slow in all G7 countries except the U.S. for the next five years, and as the GDP of the BRICS countries, particularly India, is set to continue to grow during the same period. This ongoing development has meant a shift of economic power from traditional powerhouses to new economic centers such as India and China.
