In forex trading, GDP or Gross Domestic Products is one of the most important economic indicators when we talk about the economy’s strength.

GDP debt to ratio

GDP to Debt Ratio represents an important ratio between a country’s government debt and its gross domestic product (GDP). GDP to Debt Ratio shows how much money the country earns every year and how that compares to the money that country owes. A low debt-to-GDP ratio indicates that the economy is sufficient to pay back debts without incurring further debt.

To calculate GDP to Debt Ratio, we need to divide debt measured in units of currency and its gross domestic product (GDP) (measured in units of currency per year).  Please check the GDP to Debt ratio by country in our research article.

The biggest GDP to debt ratio has Japan 237% because of huge debt. Greece (177%) and Italy (156%) have the worst GPD to debt ratio in Europe (EU 77.6%). US GDP to debt ratio is 108% and it is moderate value for the strongest world economy.

Below is Table that shows the latest GDP to Debt Ratio by country:

GDP is one of the most important economic parameters used when measuring the growth of an economy.

What is GDP?

Gross Domestic Product or the GDP is the monetary measure representing the total value of goods and services produced in a specific time period. GDP shows the size and health of a country’s economy. Gross Domestic Product includes private and public consumption, private and public investment, and exports less imports.

The world’s strongest economies have higher GDPs than the rest.

How to calculate GDP?
GDP can be calculated using the expenditure approach or income approach. To calculate GDP using the expenditure approach, we need to collect all private consumer spending within a country’s economy, including durable goods (C); total government expenditures, including salaries of government employees, military expenditure, road construction/repair, and public schools. (G); the sum of a country’s investments spent on capital equipment, housing and inventories (I) and net exports (total exports less total imports, NX):

GDP = C + G + I + NX

To calculate GDP using the income approach, we need total national Income, Sales Taxes, Depreciation, and Net Foreign Factor Income.

GDP = Total National Income +Depreciation Sales + Taxes +  Net Foreign Factor Income.

Total National Income represents the sum of all wages, rent, interest, and profits. Sales Taxes imply consumer taxes imposed by the government on the sales of goods and services. Depreciation in the income approach represents the cost allocated to a tangible asset over its useful life.

Does GDP include intermediate goods?
No, economists do not include intermediate goods when they calculate gross domestic product (GDP). Intermediate goods are products that are used in the production process to make other goods. Economists do not want to include intermediate goods in GDP to avoid counting several times purchasing/selling these goods.

GDP debt to ratio

GDP to Debt Ratio represents an important ratio between a country’s government debt and its gross domestic product (GDP). GDP to Debt Ratio shows how much money the country earns every year and how that compares to the money that country owes. A low debt-to-GDP ratio indicates that the economy is sufficient to pay back debts without incurring further debt.

To calculate GDP to Debt Ratio, we need to divide debt measured in units of currency and its gross domestic product (GDP) (measured in currency units per year).  Please check the GDP to Debt ratio by country in our research article.

What is GDP per capita?
GDP per capita or Gross Domestic Product per person represents total GDP by the population. Usually, the strongest economies in the world have high-value GDP per capita. However, GDP per capita is highly misleading if used as an indicator of the quality of life because there are discrepancies most of the population perceives between growth in GDP per capita and improvement in their quality of life.

What is the difference between GDP and GDP per capita?

GDP shows the total value of one country’s goods and services, while  GDP per capita (GDP per person) is GDP value divided by population. GDP per capita is a measure to compare different economies in a better way.

See GDP per capita by country:

GDP of a country seldom remains the same. Even the world’s largest economies by GDP witness ups and downs over a period of time. However, it is interesting to see that irrespective of these fluctuations, the leading world economies do not quickly move up or down the chart of being the world’s strongest economies. 

If we look at the list of 25 top world economies by GDP, only three new countries have entered the list since 2000 – Nigeria, Indonesia, and Thailand. However, some of the economies have moved big-time within this list. China was in the sixth position, and India was in the 13th position in 2000. Still, they both moved up significantly, with China being the second economy on the list and India standing strong in the 5th position. Before 2000, Indonesia was in 27th place but moved to the 16th spot in 2019. However, Nigeria made huge leaps and bounds when it jumped from the 46th position to 25th place. 

COVID-19 has had a huge impact on all the countries irrespective of their sizes. Therefore, we will consider the recent annual data released in 2019 for comparison. The global pandemic saw the degradation of cratered tourism, energy prices: trade volume, and shuttered stores. Because of quarantine and lack of economic activities, most countries’ GDP has seen a record-breaking decline. 2020’s third quarter saw many economies getting stronger again, but most countries can still be seen struggling in one way or another. Any country has not achieved the pre-pandemic level of GDP except for one, China. It is the only country in the entire world that ended the year with a GDP larger than the previous year!

What is nominal GDP?

Nominal GDP represents the value of all finished goods and services produced by a country at its current market prices. Nominal GDP measures a country’s gross domestic product using current prices without adjusting for inflation.

What is Real GDP?

Real GDP is a measure of a country’s output in terms of the value of its goods and services, its investments, its government spending, and its exports. Real GDP takes nominal GDP and adjusts for inflation or deflation by comparing and converting prices to a base year’s prices. In simple words, real GDP measures a country’s economic output adjusted for the impact of inflation.

Nominal GDP vs. Real GDP

• Nominal GDP measures a country’s gross domestic product using current prices while measures a country’s economic output adjusted for the impact of inflation.
  
• Nominal GDP, by definition, reflects inflation, while real GDP uses a GDP deflator to adjust for inflation.
• The country’s nominal GDP is generally higher than its real GDP because inflation is generally positive.
• Nominal GDP is better to use when you compare different quarters of output within the same year.
• Real GDP is better used when comparing GDP over several years ( remove inflation from the equation).

About the World Bank database, the following ways of measuring GDP have been mentioned in this article. 

Nominal GDP: The most basic and preferred way of comparing the two countries’ GDPs is Nominal GDP. The local currencies and prices are converted into USD to make the base currency identical for comparison. This is the method that is used to determine the world’s leading economies.

Purchasing Power Parity: Also known as PPP, it is an alternative way of comparison. In this method, currencies are adjusted to basket goods’ purchasing power rather than the exchange rate. It is more about the cost of living rather than the strength of the currency.

GDP Growth: This is the comparison drawn between a country’s present GDP and the previous year’s GDP. It is done at the local currency prices. The aim is to see the percentage change and determine the growth of the country. 

GDP Per Capita: In this method, the nominal GDP is divided by a country’s population. It is an average that shows you how much per person is producing in a country. Per capita can also tell us about the income of an individual and their living style. 

In this article, GDP refers to nominal GDP unless otherwise stated. So, the top economies are:

In the next chapters, we will analyze top world economies.

Before we continue just to analyze one economy that is not on the list – The European Union’s economy.

What is the GDP of the European Union?

The European Union’s GDP is 15593 USD Billion (around 15 trillion dollars) based on the last report in 2020 for the year 2019. The GDP of the EU represents around 1/6 of the global economy. EU is the second-largest economy in the world in nominal terms, after the United States, and the third one in purchasing power parity (PPP) terms, after China and the United States.

Let us see GDP by country below and then detail analysis:

1. United States gross domestic product

What is the GDP of the US?

• $21.43 trillion is the Nominal GDP for the year 2019 in the present-day U.S. Dollars
• $21.43 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 2.2% GDP Growth in the year 2019
• $65,298 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

As per the nominal GDP, the United States has the largest economy of all other nations globally due to its service sector, including business services, healthcare, insurance, professional services, real estate, and finance. 

Providing foreign direct investment and flexible business investment facilities, the U.S. is known to be an open economy. It is also considered the world’s primary geopolitical power; it mostly sustains a huge external debt because it is the nation’s primary reserve currency producer. The U.S. leads in technological terms in several industries. However, it still faces recurring challenges regarding social safety net costs, economic inequality, deteriorating infrastructure, and increasing healthcare costs.

2. China gross domestic product

• $14.34 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $14.34 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 6.1% GDP Growth in the year 2019
• $10,262 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Currently ranked as the second-largest nominal GDP and the largest PPP globally, China is already on its way to becoming the largest economy in the world as per nominal GDP. 

With its new industrial policy promoting domestic manufacturing, China has gained the number one exporter globally. Certain measures taken by China have aided manifolds in the improvement of their living standard and economy. These include permitting flexibility in market prices, unbarred economy, more individualism in businesses. Although there are improvements, China continues to be challenged by its problems of environmental degradation and over-population.

3. Japan gross domestic product

• $5.08 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $5.49 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 0.7% GDP Growth in the year 2019
• $40,247 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

With its ameliorating technological knowledge and coordination between industry and government, Japan has gained the world’s third-best economy. Japan owes this growth to the excellent policies formulated by their Prime Minister Shinzo Abe who is the reason behind the growth Japan has seen coming out of the great global recession experienced in the 1990s. However, Japan has many challenges yet to be overcome, including dependence on imports of natural resources and its aging population, among many others. One powerful backlash that Japan faced was the shutting down the country’s nuclear power industry, which was caused due to the Fukushima disaster in 2011.

4. Germany gross domestic product

• $3.86 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $4.68 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 0.6% GDP Growth in the year 2019
• $46,445 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Germany holds the fifth position in the world economies along with being the largest economy in Europe. Having the top position as the exporter of machinery, chemicals, manufactured goods, and vehicles with a strong, skilled labor base, Germany has mastered this success. There remain certain challenges to overcome, including a high immigration rate and difficulties in the working folk’s evolution. 

5. India gross domestic product

• $2.87 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $9.56 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 4.2% GDP Growth in the year 2019
• $2,100 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

India stands at the fifth position in the world economy. It has the least per capita GDP owing to its immense population. India’s economy consists of an amalgamation of mechanical agriculture, traditional farming, traditional handicrafts, and modern industry. India is a well-known exporter of technical services, which adds up its service sector as a major contributor towards economic well-being. The liberalization policy acts as a boon for the economy; however, certain banes include extreme poverty, corruption, and strict business relations.

6. United Kingdom gross domestic product

• $2.83 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $3.25 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.5% GDP Growth in the year 2019
• $42,330 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The 6th largest economy in the nation is the United Kingdom. It has scaled up by 1.4% from last year. Their economy’s success comes from their large service sector of insurance, finance, and business services. However, the huddle faced by the economy of the United Kingdom is extremely complicated. The decision to move out of the European Union and the resolution of Brexit has impacted the trading relations of the company more than was expected. No longer a part of the European Union as of 31 January’2020, negotiations are still going on concerning the trading business. 

How much does tourism contribute to the UK GDP?

In 2020, the contribution of travel and tourism to GDP (% of GDP) for the United Kingdom was 11 %. The contribution of travel and tourism to GDP (% of GDP) of the United Kingdom fell gradually from 13.5 % in 2001 to 11 % in 2020. From 2017. till 2020. tourism contribution is around 11% to the UK GDP. Tourism generated 137.8 billion dollars in 2019 (106 billion pounds) only in England.

7. France gross domestic product gross domestic product

• $2.72 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $3.32 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.5% GDP Growth in the year 2019
• $40,494 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

France ranks seventh in the list of world economies. The major source of revenue for France continues to be its excellent tourist industry. The mixed economy of the country has private and semi-private businesses running alongside different industries. The government of the country still holds fast on to certain industries, including defense and electric power. The cause of misery for their economy is the government’s firm intervention to maintain social equality, which leads to a plethora of hindrances such as an inflexible labor market, unemployment, and high public debt. 

8. Italy gross domestic product gross domestic product

• $2.00 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $2.67 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 0.3% GDP Growth in the year 2019
• $33,228 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Italy has the eighth largest economy in the world, with a GDP growth rate of 0.3%. Additionally, Italy is also the third-largest economy in the eurozone. Italy’s challenges are numerous due to its extremely high public debt, which slows down economic growth. Other hurdles that the economy faces include an inefficient banking sector, weak labor market, high unemployment rate, an inefficient judicial system, and the prevalence of a huge underground economy. 

9. Brazil gross domestic product gross domestic product

• $1.84 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $3.23 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.1% GDP Growth in the year 2019
• $8,717 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The ninth-largest economy in the world is Brazil, along with being the largest in South America. It gains its excellence from the big industries of aircraft, mineral extraction, energy extraction, and automotive production, along with its huge export of coffee and soya beans. Brazil faced a massive loss on account of the 2017 recession and corruption scandals. However, the barriers were overthrown with the extraordinary economic reforms targeted at investing in energy infrastructure, making foreign investment more flexible, ameliorating the labor market conditions and public spending. 

10. Canada gross domestic product

• $1.74 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.93 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.7% GDP Growth in the year 2019
• $46,195 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Canada stands at the tenth position in the world economies with a GDP growth rate of 1.7%. The country’s exceptional energy extraction sector and its well-functioning manufacturing and service sectors contribute to its world economic position. Another advantage that Canada holds is its good relationships with the United States through which at least three-quarters of Canadian production finds a market in the States. The U.S. being the world’s largest economy, Canada benefits massively from it. 

How much does oil contribute to Canada’s GDP?

Canadian oil and natural gas provided $110 billion to Canada’s gross domestic product (GDP) in 2019, and it is 6.3% of the total GDP. Oil and natural gas business supported more than 500,000 jobs across the country in 2019 and provided $10 billion in average annual revenue to governments for the period 2017 to 2019.

11. Russia gross domestic product

• $1.70 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $4.28 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.3% GDP Growth in the year 2019
• $11,585 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The eleventh position in the world economy is occupied by Russia, with a GDP growth rate of 1.3%. Even after a movement towards a market-based economy over the years happening because of the collapse of the Soviet Union, the hurdle in this economy’s growth happens to be the governmental invention and ownership. Russia being a major oil and gas exporter, its economy is vulnerable due to its sensitivity to the alterations in the commodity prices around the world, causing an inevitable problem. 

12. South Korea gross domestic product

• $1.65 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $2.23 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 2.0% GDP Growth in the year 2019
• $31,846 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

South Korea stands at the 12th position globally with a GDP growth rate of 2.0%. It stands as the prime example of a modern established economy. The country is renowned for its business conglomerates as well as exemplary export strategies. South Korea has a major market share in exporting telecommunication equipment, electronics, and motor vehicles and has formed an immense network with 58 countries worldwide. The problems faced by South Korea include other conventional problems such as aging personnel and sluggish growth. 

13. Australia gross domestic product

• $1.40 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.36 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 2.2% GDP Growth in the year 2019
• $55,060 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Australia takes the position of the 13th largest economy in the world. Its success lies in its huge network and trade with countries of the Asia-Pacific Rim. The flexible domestic economy and the abundance of natural resources and agriculture industries provide scope for growth. The only scope of challenges for the country lies in its dependence on the other countries’ demand for agricultural products, metals, and energy, along with their fluctuating prices. 

14. Spain gross domestic product

• $1.39 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.99 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 2.0% GDP Growth in the year 2019
• $29,600 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

With a GDP growth rate of 2.0%, Spain is the 14th largest economy in the world. The country has suspended the Great Recession’s challenges that caused massive unemployment and increased national debt. The country has recovered from the shock creating a strong export base of manufactured machinery and food products. The ongoing hurdle occurs due to the country’s political instability, which is a big challenge for the government.  

15. Mexico gross domestic product

• $1.27 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $2.63 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• -0.1% GDP Growth in the year 2019
• $9,846 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The 15th largest economy in the world is Mexico, with a Nominal GDP of $1,27 trillion. The reason for the success of the country’s economy can be weighed down to the emergence of the manufacturing industry of Mexico over the past thirty years. The country now has free trade arrangements being carried out with 46 countries, including the major countries like Canada and the U.S. The United States has good trade relations with Mexico’s industries aiding the country in its extensive growth. Mexico provides a plethora of export services, including vehicles, auto parts, petroleum, electronics, and agricultural products, to name a few. The challenge, however, to be won by the country is the prevalence of drug trade which is a cause of violence and corruption. The lack of judiciary institutions in the country contributes to the lack of proper operation of the economy.

16. Indonesia gross domestic product

• $1.12 trillion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $3.34 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 5.0% GDP Growth in the year 2019
• $4,136 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The sixteenth largest economy in the world is Indonesia while holding the top position in Southeast Asia. The country’s strong base is its commodity export industry, which majorly includes agricultural products, coal products, and petroleum products. The country has a low debt burden; however other factors such as regional inequality, corruption of the state, and lack of infrastructure pose other problems. 

17. The Netherlands gross domestic product

• $907.05 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.03 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.7% GDP Growth in the year 2019
• $52,331 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The Netherlands reserves the 17th position in the world economies with a GDP growth rate of 1.7%. The country’s major sector is commercial transportation, petroleum extraction and processing, and industrial manufacturing. Additionally, the country is the second-largest exporter of agricultural products globally, with a highly developed and advanced agricultural sector. Further, another strong base of the country is its massive financial sector with a load of assets. 

18. Saudi Arabia gross domestic product

• $792.97 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.68 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 0.3% GDP Growth in the year 2019
• $23,140 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Saudi Arabia stands at the 18th position in the world economies. The economy’s main strength rests on its oil business, with it being the largest oil exporter in the world. The country’s government has strong control over the resources and owns and operates the country’s primary industry on its own. The country’s challenge is the increasing environmental concern of engaging in non-fossil fuel energy sources. To counter this problem, the government encourages private ownership of healthcare and other industries alongside privatizing a part of the oil business. 

19. Turkey gross domestic product

• $761.43 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $2.35 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 0.9% GDP Growth in the year 2019
• $9,127 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The position of the 19th largest economy in the world is held by Turkey, with a GDP growth rate of 0.9%. The power of Turkey’s economy lies in its massive industrial and service sector, which majorly includes electronics, automotive production, and petrochemicals. The only instability in the country occurs because of the country’s involvement in regional armed conflicts and political issues, which is a cause of the financial upheavals and uncertainty. 

20. Switzerland gross domestic product

• $703.08 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $608.72 billion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 0.9% GDP Growth in the year 2019
• $81,994 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Switzerland stands at the 20th position in the world economies with a Nominal GDP of $703.08 billion. The backbone of the country’s economy is its large service sector, inclusive of financial services. The country also has a well-functioning manufacturing sector employed with an extremely skilled labor force. The country boasts the highest per capita GDP globally due to its good quality political, legal, and economic institutions and a strong infrastructure base.  

21. Poland gross domestic product

• $595.86 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.31 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 4.5% GDP Growth in the year 2019
• $15,693 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

The 21st largest economy in the world is Poland which has a GDP growth rate of 4.5%. This economy’s major constituents are heavy industries such as coal mining, steel production, iron production, machinery manufacturing, and shipbuilding. With its solid economic base, Poland became the only country of the EU to have successfully avoided recession during the financial crisis of 2008. The challenges that now stand in Poland’s economic growth are an aging population and an inefficient judiciary and regulatory structure. 

22. Thailand gross domestic product

• $543.55 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.34 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 2.4% GDP Growth in the year 2019
• $7,807 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Thailand preserves the place of the 22nd largest world economy with a GDP growth rate of 2.4%. The country’s unique features and assets include well-built infrastructure, pro-free enterprise, and pro-investment policies. The major chunk of the GDP is obtained by exports, including motor vehicles and their parts, electronics, agricultural products, and food products. Another strong pillar of Thailand is its attractive tourism industry contributing to the country’s revenue. However, a substantial amount of the country’s labor force is engaged in the agricultural sector, which isn’t a major sector. 

23. Sweden gross domestic product

• $530.88 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $574.13 billion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.3% GDP Growth in the year 2019
• $51,615 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Having a GDP growth rate of 1.3%, Sweden occupies the 23rd largest world economy. The country follows a mixed-economy system with the stake of both free enterprises as well as social welfare. The country’s primary sector economy falls back upon its foreign machinery, telecommunications, and motor vehicles. The rising labor of Sweden is one challenge to be countered due to its rising number of immigrants. 

24. Belgium gross domestic product

• $533.10 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $630.53 billion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 1.7% GDP Growth in the year 2019
• $46,421 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Belgium occupies the 24th largest economy in the world, with a nominal GDP of $533.10 billion. The country’s economy is diverse with the inclusion of the manufacturing industry, trade and transportation industry, and high-tech industry. However, Belgium depends on the neighboring countries’ performance to fully benefit in its trade due to its deep integration with them. Another hurdle in the growth of the country is its high public debt. 

25. Nigeria gross domestic product

• $448.12 billion is the Nominal GDP for the year 2019 in present-day U.S. Dollars
• $1.08 trillion is the PPP Adjusted GDP for the year 2019 in the present-day International Dollars
• 2.2% GDP Growth in the year 2019
• $2,230 is the Nominal GDP Per Capita for the year 2019 in the present-day U.S Dollars 

Nigeria backs the 25th largest economy in the world with a GDP growth rate of 2.2%. The root cause of the success of this economy is its oil exportation. Nigeria occupies the continent’s largest oil exporter’s position, having the largest natural gas reserves in Africa. The other industry contributing to the revenue is the extraction industry, including coal, tin, and other metals. Additionally, almost a fifth of Nigeria’s economy includes agriculture, mostly dominated by small-scale subsistence agriculture. The challenges that stand in front of this country’s growth are lack of proper infrastructure, desertification, and corruption.

These are some of the thriving economies of the world. Though COVID-19 has changed the world and its economic growth, these economies have still maintained their places. The clear picture regarding this list will depend on what happens once the pandemic is over and we go back to over lives.

It’s a pretty good meaty topic that most people want to get guidance on. How you deal with the shares taking process and the main big question mark here is how you value a company. It could be just one reason, but there could be many other reasons like buying a company as well.

This question is what predators want to know before targeting their prey, like customers and sellers of big shares.

Investors are more interested in this topic to know whether they are getting the right thing or not in return for their money.

What and how do I think about money…..? To calculate an openly traded company’s market value by simply multiplying its stock price by giving outstanding shares. That’s easy enough.

What is the valuation of a company?

Valuation of a company is the analytical process of determining the current and projected worth of a company. When analysts calculate the value of a company, they analyze the business’s management, capital structure, future earnings, the market value of its assets, etc.

Now let us see how we do company valuation.

How to Calculate Company Valuation?

A company’s valuation can be calculated using Book value, Stock market value, Multipliers, or DCF analysis. When the book value is used, the data from the Balance Sheet is taken. This is the simplest and fastest method, but also the least accurate.

DCF analysis is the best method for evaluating a company. At the same time, it is the most complex. DCF analysis uses discounting the company’s future cash inflows and reducing them to present value. What is a special problem is how to determine the future cash inflow of the company. McKinsey developed the most well-known methodology for valuing a company. Their methodology is well described in the book Valuation: Measuring and Managing the Value of Companies, ISBN 0470424702, www.mckinsey.com.

But the whole process for private companies isn’t simple though straightforward or rather transparent. Private companies don’t report their financials, and since there’s no stock listed on an exchange, it’s often difficult to determine the company’s value.

If you are trying to figure out the value of a company or business, whether you plan to take hold of other businesses or sell your own start-up, there is a formula that helps to have a maximum and an accurate estimate of that figure. Even if you hire someone to evaluate the company’s assets and arrive at the business’s valuation, it’s important to understand the methods they use.

Stock market company value formula

Simple Enterprise Value of company formula is:

Company Value = Market capitalization + Total Debt – Liquid assets of the company

The whole Enterprise value of the company is:

EV = Common Shares + Preferred Shares + Market Value of Debt + Minority Interest – Cash and Equivalents

See how to calculate the value of the company:

KEY TAKEAWAYS AND KEYNOTES

Taking out the company’s estimated figure or organization of the public sector is much easier than the private sector. You can use the other equivalent company’s analysis method, which involves looking for similar public companies. Using the facts and figures of a private sector company’s closest public competitors, you can determine its value using the EBIDTA or enterprise value multiple.

Private vs. Public Ownership

The most obvious difference between privately-held and publicly-traded companies is that public firms have sold at least a portion of the firm’s ownership during an initial public offering (IPO). An IPO gives outside shareholders and the opportunity to purchase a stake in the company or equity in the form of stock. Once the company goes through its IPO, shares are sold on the secondary market to investors’ general pool.

The ownership of the private companies remain held and open to mostly the selected and few of the shareholders that makes it really difficult for the others to get the estimate of their assets and finances since everything remains closed to the few people and those people are only the shareholders and the stakeholders, unlike the public companies who share rate are always open to the local market, and everyone can see them. That makes it relatively easier for other people to buy them since they see things are transparent.

Private vs. Public Reporting

Public companies always adhere to the accounting and financing to the market and disclose their information to the public sector. Hence, the people know when and how they have to buy that specific public company’s shares. Since this has been the case, public companies are bound to report their finances and accounting.

Private companies work in a free flow because they don’t have to show up their account by the SEC policy, and any strict policies do not bind them. They work as they want without any hard restrictions, unlike public companies.

Below you can see how to calculate the valuation of a small company:

Public Market

The biggest plus of becoming a public sector company is the aptitude to knock the public financial markets for money by issuing public bonds or business bonds. When you have direct access to that such capital, this will be a definite advantage for you to raise funds to take on new projects or expand the business.

Why Valuation Matters

Calculating the worth of a business is essential if you’re buying or selling, but that’s not the only reason.

If you’re looking for financing, lenders, investment bankers, and venture capitalists will want to know what the company’s worth.

If you’re in a partnership and one partner wants out, you need to calculate the value of that partner’s share of the company.

A business valuation may be required in a divorce so you can divide up marital assets equitably.

The valuation of a company can be contentious. For example, your partner may want a higher value for his stake in the partnership scenario than you think his share is worth. That’s why objective valuation methods are useful.

How the Discounted Cash Flow Valuation
How to create a valuation of a company using the DFC method in the video below:

The Discounted Cash Flow, also known as (DCF), is a much more operational method for establishing its value.

To know the company’s valuation, whether, if any, a company by DCF requires more number-chomping than asset evaluation. If you are considering how much capital or profit a business will generate in the future, it will provide a much better view and the idea of the company’s real worth, which would be present.

DFC evaluation formula is based on Growth, COGS (cost price, but without depreciation), OPEX (operating costs), DSO (receivables collection period), PART(inventory retention period), DPO (supplier payment period), CAPEX (investment in fixed assets).

How can you calculate the DCF of a company?

For the immense calculation of your company’s future revenue or any other’s company, you can base that idea on forecasting the growth. You can base this on a simple growth forecast or consider factors such as price, volume, competition, and your customer base. The second option takes more work. Project your expenses and your capital assets. Combined with revenue, this lets you determine your future cash flow.

What are the advantages of DCF?

This valuation method has many great advantages, such as its function as a tool for its asset valuation. It doesn’t require comps. You can rely on the DCF method results by assuming the future cost of the company’s asset.

You can use DCF with multiple scenarios as to how the future plays out.

Though this method uses a lot of math but using and applying some of the excel work, you can go through it.

What are the disadvantages of DCF?

Although using the DCF method has some of its errors and drawbacks, it must be considered in one note.

You use most of your assumptions about future growth and cash flow. It’s appealing to make them overly optimistic.

Chang in your expectations can create drastically different future cash flows. Calculating the DCF is a complex method and allows multiple errors to be made when calculating.

With the use of Excel sheets, it’s easy to make calculations based on a DCF method calculation. Making an accurate DCF calculation, however, takes skill and experience on top of that.

What are the key economic indicators of a country? How do you determine if the country is doing well or not? Certain factors cumulatively establish the country’s worth, like its mortality rate, life expectancy, and education, but the most common remains its economic indicators. Economic indicators of a country, on numerous occasions, become the countenance of how well a country is doing.

What are Economy Indicators?

Economic indicators are the reports released by government agencies, NPOs, and private organizations. These reports provide a statistical evaluation of a country’s economic health. These indicators account for several factors like the total production of goods and services in a financial year, current business cycles, consumers’ and producers’ behavior, and more. Basic economic indicators may be released daily, weekly, or monthly, but the major ones have fixed quarterly or annual cycles.

Before we discuss the major economic reports, one must keep in mind that we are not solely talking about money when we are dis economic indicators. These indicators are massive and play a key role in various independent studies and analyses as well.

The Top 10 Leading Economic Indicators

What are the best indicators of a thriving economy? GDP growth is the most important economic indicator of a thriving economy. Of course, Industrial production, retail, etc., everything is connected, and the growth of GDP usually means the growth of several important economic indicators. Real GDP is adjusted for inflation, while nominal GDP is not adjusted for inflation. The 3 most important economic indicators are CPI, GDP, and Unemployment.

Key Economic Indicators are Real Gross Domestic Product (GDP), Consumer Price Index (CPI), U.S. Nonfarm Payrolls (NFP) Data – Current Employment Statistics (CES), Retail Sales, Producer Price Index (PPI), Consumer Confidence Survey, Money Supply (M2), Housing Starts, Manufacturing and Trade Inventories and Sales.

As we have mentioned earlier, numerous economic reports are published every year. Some of these reports are easy to understand, but if you study them with the outlook of trade or investment, we advise you to take an expert opinion. The data in these reports are susceptible, and even the slightest change can have a ricocheting effect. The current economic indicators are exact, but you should still not isolate one economic report and judge the country on its basis. However, you are not required to read all of them. So what are the 10 most important economic indicators, and how can you use them?
It is essential to identify economic indicators by the importance, so the recommendation is always to look: CPI, GDP, and Unemployment and then all other indicators.

Real Gross Domestic Product (GDP)

What is Real GDP?

Gross Domestic Product or GDP is the total value of all the final goods and services produced in a country in one financial year. Economists consider two types of GDPs: real GDP and the other is called Nominal GDP. The major difference is that inflation is adjusted when we are talking about Real GDP. It takes into account the change in year-to-year prices. 

Here, the wealthy society’s social depending on how fast the profits might grow and the expected return on capital. The HDI considers it a narrower approach as it calculates the health of the economy against the monetary increase or decreases only.

Its importance?

The Real GDP provides some data that helps the central or federal banks in adjusting their monetary policies.

From where can you get the data?

You can read the data on various government sites. For example, in the U.S.A, the report is issued by the Department of Commerce’s Bureau of Economic Analysis. You can view it at www.bea.gov. It is released quarterly after revisions are made. The data has ‘advance estimates,’ ‘preliminary estimates,’ and the ‘final numbers.’ Along with the data, the reasons for the increase or the decrease in GDP are also explained.

Consumer Price Index (CPI)

What is the Consumer price index (CPI)

The consumer price index is based on the relationship between consumers and their purchasing power. It notes the average price level fluctuation in the goods and services purchased by urban households in a month. It focuses on the cost of living. The fluctuation in the level of money spent on products and services helps in determining the inflation rate.

CPI is based on averages; that is, it will not consider every item that an individual will buy and collect information about several goods and services spread in over 200 item categories. This data can be collected virtually or by visiting urban areas. As the data is more focused on the expenditure on consumable products and services, it excludes income, investments in bonds, life insurance or stocks, and Social Security taxes. However, the sales tax is included in the data as it is paid directly by the consumer when purchasing.

Its importance?

CPI is one of the best economic indicators used to understand the level of inflation prevailing in a country. It is closely read by financial economists who make assumptions about how the economy may move by utilizing this data. Changes in the inflation level alert the Federal Bank that it is time to change the monetary policy.

From where can you get the data?

In the U.S., BLS is responsible for this task. They sample all the urban areas on average and release the CPI every month. CPIs for three metropolitans are released every month while done on a bi-monthly basis for other metropolitans. The report is particular, and you can find it on www.bls.gov/cpi/home.htm.

U.S. Nonfarm Payrolls (NFP) Data – Current Employment Statistics (CES)

Non-Farm Payroll or NFP represents the change in the number of people employed outside the agricultural sector (industry, public sector, services, etc.). An increase in employees could potentially strengthen the currency, while a decline could weaken it. Why is the agricultural industry not included in the report? We will answer immediately! Weather conditions and seasonal changes (mostly) affect the farm sector, while other sectors are more strongly related to their economic needs. That is why the report is called Non-Farms Payrolls. Non-farm payroll dates you can analyze on our website.

What is Current Employment Statistics?

As the name suggests, CES is related to employment and earnings across non-agricultural industries like civil government workers. It talks about the current situation rather than in the past. It is a survey conducted every month by the Bureau of Labor Statistics to know about employment, wages, unemployment, working hours, and earnings based on the company payroll. It has a broader approach as the research is disseminated in many ways, including employment/unemployment rates among different genders and ethnic groups.

The survey is based on the information gathered from 300,000 establishments across 600 industries. This is approximately one-third of the total employees who belong to the formal sector. The survey relies on hours of working. Therefore, when we talk about employed personnel, we consider both full-time and part-time employees who receive a certain income for hours they have worked for. Even the employees on paid vacations and sick leaves are included in this survey. However, it does not include unpaid family members, volunteers, self-employed people. In other words, a person will be covered in this survey if they are on the payroll of a company.

Its importance?

CES is deemed prominent when we are talking about strong economic indicators as it is the earliest report that is released every month. Economists pay special attention to CES as it tells about the employment and wage trend in the non-agriculture sector. It talks about how many jobs have been lost or gained in that month and how many people have earned above the minimum wage.

The trends derived from the payroll data are also interesting. You can get to know how many hours have people worked on average and how they were compensated on an hour. Important to understand these trends as they tell the authorities about wage inflation.

From where can you get the data?

You can get the data from www.bls.gov/ces/home.htm. It is shared by the Department of Labor’s Bureau of Labor Statistics in the U.S.

Retail Sales

Retail sales in the USA is a report that shows changes in the volume of sales in retail stores every month. It is published two weeks after the reference month (data are for the last month). The U.S. Department of Commerce issues it. Retail volume is one of the indicators of consumer consumption, so as an indicator of consumer demand and consumer confidence, it can serve as a guide for currency markets. This indicator is divided into: “car sales” and “sales of everything else.” Since the number of vehicles is a very volatile value, more accurate information is provided by the part of the indicator that does not include “car sales,” i.e., U.S.Core retail sales.

The growth of retail volume is a positive factor for developing the national economy and leads to an increase in the national currency value. The indicator marks the strength of consumer demand. Its growth indicates an increase in the production of goods, strengthening the economy and currencies.

What is Retail Trade Sales And Food Services Sales?

As one of the top 8 economic indicators identifies the increase or decrease in different food-oriented sectors’ sales. The retail and foodservice sales changes are measured every month, and the reports are released.

5000 random samples from retail and food service firms are taken for consideration. The sales have corresponded to the present three million firms of the country that fall into this category.

Its importance?

Two-thirds of U.S. annual GDP comprises of spending on the consumption of foo-related items or services. An acceleration or declaration in the spending trends can help the analysts to identify future spending habits.

From where can you get the data?

The responsible department releases this data monthly. You can get the details at  https://www.census.gov/.

Producer Price Index (PPI)

What is the Producer Price Index (PPI)?

Like the CPI is measured from the consumers’ perspective, the PPI is measured from the producers’ perspective. It is more like a business equivalent to the CPI. The PPI calculates the average change in the selling price of goods and services produced over a specific time period. It considers the price movements that happen at the wholesale level rather than the price changes that take place at the retail levels.

When calculating the GDP, we consider the final price of all the goods and services to avoid double-counting. Still, in PPI, we measure the prices throughout the stages of production – crude goods, intermediate goods, and the final goods to check the price movement.

Its importance?

The PPI provides the first step of inflation as it can be detected by analyzing the price movements of crude goods. If detected on time, the inflation can be controlled by intervening at its primary stage. This way, there will not be inflation in the CPI, and the economy will function smoothly. Identifying economic indicators is crucial.

From where can you get the data?

The Department of Labor’s Bureau of Labor Statistics takes care of both PPI and CPI. They release the data monthly. You can get the report during the second full week of the month. You can access the report at www.bls.gov/ppi/home.htm.

Consumer Confidence Survey

What is the Consumer Confidence Survey?

The Consumer Confidence Survey provides good economic data about the nation’s trust in the economy. It reflects the degree of optimism that people have towards the U.S. economy. Their savings and spending activities depict it.

To know whether the public is optimistic or pessimistic towards the economy, around some random 5000 people are asked to participate in a survey. It is not mandatory for everyone. These participants are asked questions about the labor market, their spending behavior, business conditions, financial and professional growth expectations for the next six months or more. The survey is not point-based. The individuals are asked to choose among the three options: positive, neutral, and negative.

Its importance?

As a rule of thumb, a person is reluctant to spend money when there is no job security. They will be more encouraged to save and may even reduce their monthly expenditure on the necessities. This is not a sign of a positive economy. On the contrary, a person spends more when they are confident that their income will not stop. They are confident about their growth concerning that of the economy. Such behavior helps policymakers about the health of the economy.

From where can you get the data?

The data is released on the last Tuesday of each month by the Conference Board’s Consumer Research Center. You can get the full report at http://www.conference-board.org/data/consumerconfidence.cfm.

Money Supply (M2)

What is Money Supply (M2)?

In macroeconomics, Money Supply refers to the total value of money available for circulation in a country at a given point in time. As one of the five major economic indicators used by the Forex traders, the data of M2 is strictly based on the physical currency available like coins, bills, demand deposits, fixed deposits, traveler’s checks, assets in retail money market accounts, mutual funds that are less than $100,000, or other term deposits.

The data is exclusive of institutional money fund assets or time deposits that are more than $100,000.

Its importance?

The key economic figures supplied by this data allow the banks to review the country’s current financial and economic conditions. After considering the stats, they alter their monetary policies by lowering or increasing interest rates. This is done to control the circulation of money in the economy.

M2 is helpful for economists and uses the data to make predictions about cyclical economic recessions. The same data is used to determine the possible recovery time and changes in stock prices. You can use M2 to speculate about changes in monetary policies.

While M2 has been around for a while, with the introduction of new indicators, its importance has declined over the last two decades. This is because the new economic indicators are more adept in keeping up with the movement of money, like the transfer of funds from savings accounts to investment accounts, the internationalization of the economy, and the new depository products. These things can render M2 redundant as it can easily go out of sync when tracking these movements.

However, let’s not neglect that M2 does have great use when talking about long-term analysis. Banks and economists do deploy this data to assess the long-term growth or reduction in currency circulation. The interest rate is decreased to give a jolt to the sluggish economy and increase the money supply. In contrast, the opposite is done to control the flow of money when the economy is overheated.

From where can you get the data?

In the U.S., the Federal Reserve System’s Board of Governors is responsible for releasing the data. It is done weekly (on Thursdays) and monthly. This data has become a staple for the researchers and has been getting published since January 1959. You can find the details at www.federalreserve.gov/releases/h6.

Housing Starts (Earlier called “New Residential Construction”)

What is Housing Starts?

Housing Starts includes the new residential constructions that start during a particular month. It is an essential economic factor to consider. When construction begins on the footings or foundations of a single-family residence or under multiple-unit buildings, it becomes a part of that month’s Housing Starts. The data depicts the monthly permits issued for residential construction and the number of projects that have been finished.

Its importance?

It is one of the best indicators of a strong economy because you would pay to construct a house when you are doing well in other areas of your life. From the analysts’ point of view, they see how the change in mortgage rate affects Housing Starts. This is a highly volatile indicator. A change in Housing Starts can affect the financial conditions of the nation. Economists can figure out long-term trends by reading the housing starts.

From where can you get the data?

The U.S. Department of Commerce’s U.S. Census Bureau is responsible for collecting and publishing the monthly Housing Start data. You can find it online at https://www.census.gov/topics/business-economy.html.

Manufacturing and Trade Inventories and Sales

What is Manufacturing and Trade Inventories and Sales?

The collective data of shipments by manufacturers and the value of trade sales, along with the value of wholesale and retail inventories of a particular month, provide the data for manufacturing and Trade Inventories and Sales. The data shows the approximate ratio between inventories and sales. That is, how long will the inventories last if the sales continue at the same rate.

Its importance?

This data is the primary source that shows business inventories: business sales. Analysts use this data to identify whether the economy is growing or contracting. If the inventories are growing faster than sales, the economy is slow as people are purchasing less. The economy is flourishing if the sales surpass inventories.

From where can you get the data?

The data is released by the Department of Commerce’s U.S. Census Bureau. You can find more details at  https://www.census.gov/topics/business-economy.html.

In the end, this is not a report, but it is an excellent fundamental indicator of the US economy:

S&P 500 Stock Index (the S&P 500)

What is the S&P 500?

The S&P 500 stands for Standard and Poor 500. It is an index that shows the market value of 500 stocks publicly owned and placed in one equity basket. This basket has now become the industry benchmark for the performance of the U.S. equity markets.

Its importance?

The index shows the changes in the stock prices of the 500 companies. Economists use it to measure the nation’s stock of capital and estimate the consumers’ confidence in the economy. It can signal long-term trends in stocks and futures markets.

From where can you get the data?

Standard & Poor’s gathers the data and releases this index. It shows real-time information, as well. You can track it at https://www.standardandpoors.com.