20 Countries with the Best Economy in the World
In this article, we look at 20 countries with the best economy in the world. You can skip our detailed analysis of what constitutes a prosperous economic environment, and head over directly to see the 5 Countries with the Best Economy in the World.
Gross Domestic Product (GDP) is the market value of goods and services produced in a country within a given time period. For far too long, GDP has been used as an indicator of how well an economy is performing. However, in recent times, there has been greater acceptance that this alone is not the only measure of a nation’s economic wellbeing. Countries with healthy economies tend to have healthy competition, free markets, and stable micro and macroeconomic conditions.
One key factor is economic freedom. The Heritage Foundation releases its annual index each year that ranks countries on advancements made in economic freedom. This is a concept it describes as the rights of individuals to control their labor and property in any way they please, without government intervention – except in cases where constraints are required to uphold liberty. Singapore is the freest economy in the world, having being ranked first on the 2023 Economic Freedom Index. Moreover, despite being an island city state having a population of a mere 5.5 million, it has a per capita GDP that is nearly seven times higher than China's and more than 30 times greater than India's.
These two countries make up for nearly 40% of the world's population and are tipped to be the two largest economies in the world by 2050, ahead of even the United States, but the wellbeing of an average citizen of theirs is lower than someone living in Singapore, Switzerland, or the United States.
Technological advancement is just as important. Trends and developments in technology over the last few decades have improved the way we live our lives, by allowing us to be more efficient in what we do. Breakthroughs made in several fields have been the very essence of human development. Corporations around the world have been playing an instrumental role in using technology to uplift the standard of living and help expand the global economy.
A number of companies have increased spending on Artificial Intelligence (AI). According to PwC, the global AI market is estimated to be worth $15 trillion by 2030. Amazon.com, Inc. (NASDAQ:AMZN)'s CEO, Andy Jassy in a recent communication with shareholders, announced that Amazon.com, Inc. (NASDAQ:AMZN) was spending heavily in generative AI. It is investing $100 million to build a center to help businesses make better use of artificial intelligence. This is not the first instance of the company pumping money into technology. Amazon Go are cashier-less stores in 43 locations around the world that make the shopping experience convenient for customers by using a self checkout station.
Apple Inc. (NASDAQ:AAPL), in 2021, committed $430 billion in job-creating investments in the United States, in innovative areas such as 5G technology and silicon engineering. Included in this plan was construction of a new engineering hub in North Carlina worth $1 billion, creating thousands of new jobs in machine learning, software engineering, and AI. Close to 3 million jobs in the U.S. are supported by Apple Inc. (NASDAQ:AAPL) through direct and indirect employment.
It is also among the highest taxpaying companies in the country, having paid nearly $45 billion between 2016 and 2021. This is a great example of how corporations create wealth and improve how we live, by creating jobs to produce high quality, innovative products that sell because of their superior offerings to generate profits and tax money.
Vlad G/Shutterstock.com
Methodology
We have ranked countries with the best economies in the world using our analysis in the 50 Largest Economies in the World in 2023 that ranked countries on the size of their nominal GDPs, as well as top 30 Countries with Highest GDP Per Capita. Technological advancements of countries have also been considered to form our conclusions in this article. For that, we referred to the top 25 Most Technologically Advanced Countries in the World in 2022.
Our fourth and last metric was the 2023 Index of Economic Freedom that is released by The Heritage Foundation every year, and ranks 176 countries on economic freedom on a scale of 1-100. 25% of weight has been assigned to each of these four metrics. Weights were then aggregated to get a sum which constituted the overall score for each country.
Now let's head over to the list of countries with the best economy in the world.
20 Countries with the Best Economy in the World:
20. Belgium
Overall Score: 1.92
GDP Ranking: 25
GDP Per Capita Ranking: 18
Economic Freedom Ranking: 43
Advanced Countries Ranking: 21
Belgium has one of the top economies in the world. It is major country in Europe that hosts the headquarters of several key international bodies such as NATO and the European Union. It had a GDP of $582 billion in 2022 according to the IMF, and it is among the top countries with the highest per capita GDP and technological advancement.
19. Finland
Overall Score: 2.07
GDP Ranking: 48
GDP Per Capita Ranking: 17
Economic Freedom Ranking: 11
Advanced Countries Ranking: 11
Although Finland ranks 48th on our list of countries by nominal GDP, it is among the best economies of the world due to a high GDP per capita of $51,180 in 2023. Moreover, the country also ranks well on economic freedom and technological advancement.
18. Austria
Overall Score: 2.13
GDP Ranking: 33
GDP Per Capita Ranking: 15
Economic Freedom Ranking: 23
Advanced Countries Ranking: 17
Austria is a landlocked country in Europe, but has not allowed its geography to impede its economic progress. The country boasts a nominal GDP of $472 billion and per capita GDP in excess of $50,000, making it one of the best economies in the world.
17. Israel
Overall Score: 2.25
GDP Ranking: 29
GDP Per Capita Ranking: 13
Economic Freedom Ranking: 34
Advanced Countries Ranking: 16
Israel is one of the most advanced countries in the world. It is regarded amongst nations that spend the highest on research and innovation. This is made possible due to high economic freedom in the country. In 2021, Israel attracted 28 times more venture capital investment per capita than the US. You can read more about it in our list of the best countries to invest in. In terms of nominal GDP, Israel ranks as the 29th largest economy in the world. It is major power in the Middle East region.
16. Japan
Overall Score: 2.33
GDP Ranking: 3
GDP Per Capita Ranking: 28
Economic Freedom Ranking: 31
Advanced Countries Ranking: 15
Japan is the third largest economy in the world in terms of nominal GDP. The country boasts a GDP per capita of $35,030. It is considered one of the most advanced nations in the world. Japan's economy is driven by exports in electronics and automobiles. Toyota Motor Corporation (NYSE:TM), which is a Japanese car manufacturer, holds over 11% share of the global automobile industry.
15. France
Overall Score: 2.35
GDP Ranking: 7
GDP Per Capita Ranking: 23
Economic Freedom Ranking: 57
Advanced Countries Ranking: 13
France is 15th in our list of countries with the best economy in the world. The country's economic freedom index scores are on the lower end compared to some other countries in the region. In terms of nominal GDP, France is the seventh largest economy in the world, having an output of $2.7 trillion in 2022, according to the IMF.
14. Taiwan
Overall Score: 2.51
GDP Ranking: 21
GDP Per Capita Ranking: 26
Economic Freedom Ranking: 4
Advanced Countries Ranking: 7
Taiwan ranks fourth in the world on economic freedom, and seventh in the list of the most technologically advanced countries in the world. The island nation, which is claimed by China, has a GDP per capita in excess of $35,000, and has one of the best economic systems in the world. Taiwan is home to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), which holds a 60% share in the global foundry industry.
13. Denmark
Overall Score: 2.52
GDP Ranking: 40
GDP Per Capita Ranking: 10
Economic Freedom Ranking: 9
Advanced Countries Ranking: 10
Denmark is considered one of the best countries to start a business in, due to its low rates of the corporate tax, and it being a top destination for foreign capital investment. It is especially attractive to shipping businesses in Northern Europe due to Copenhagen's status as a Scandinavian logistics hub, with access to over 100 million Nordic customers in the region. You can read more on this in our list of the Best Countries to Start a Business. These factors have led to Denmark being ranked 9th in the world on the Economic Freedom Index of 2023. The country had nominal GDP of $391 billion in 2022.
12. Norway
Overall Score: 2.54
GDP Ranking: 26
GDP Per Capita Ranking: 5
Economic Freedom Ranking: 12
Advanced Countries Ranking: 20
Norway is a large exporter of oil, and derives most of its wealth from its energy resources. Stavanger-based Equinor ASA (NYSE:EQNR) is one of the largest oil companies in the world and operates in 36 countries. In 2022, Norway had a nominal GDP of $579 billion. As far as GDP per capita is concerned, it ranks fifth in the world, with an average Norwegian earning $88,750 a year.
11. Ireland
Overall Score: 2.58
GDP Ranking: 28
GDP Per Capita Ranking: 2
Economic Freedom Ranking: 3
Advanced Countries Ranking: 22
Ireland has the second highest GDP per capita in the world, recorded at $107,000. In terms of nominal GDP, the size of the Irish economy was measured at $530 billion by the IMF in 2022. It ranks 22nd on the list of the most advanced nations in the world.
10. South Korea
Overall Score: 2.67
GDP Ranking: 13
GDP Per Capita Ranking: 29
Economic Freedom Ranking: 15
Advanced Countries Ranking: 3
South Korea is the most advanced country in Asia, and ranked third in the list of the 25 Most Technologically Advanced Countries in the World in 2022. The country is one of the greatest success stories, alongside Singapore, for developing nations to seek inspiration from. South Korea is also the 13th largest economy in the world, having a nominal GDP of $1.65 trillion. South Korea is highly regarded for its industries of electronics and robotics.
9. Australia
Overall Score: 2.72
GDP Ranking: 12
GDP Per Capita Ranking: 9
Economic Freedom Ranking: 13
Advanced Countries Ranking: 19
Australia has the 12th largest economy in the world. In 2022, the IMF estimated the country's nominal GDP to be $1.7 trillion. It also ranks high on economic freedom and technological advancement. The Australian Dollar is one of the most traded currencies in the world, with a daily trade volume of $479 billion in the foreign exchange market. You can read about other strong currencies in 15 Most Powerful Currencies in the World.
8. Singapore
Overall Score: 2.73
GDP Ranking: 34
GDP Per Capita Ranking: 6
Economic Freedom Ranking: 1
Advanced Countries Ranking: 12
Singapore is the freest country in the world, having being ranked first by The Heritage Foundation in the Economic Freedom Index of 2023. The island city state also has one of the highest GDP per capita in the world, recorded at $84,500. The country's nominal GDP was measured at $467 billion in 2022. Singapore is a major financial hub, with its currency accounting for 1.8% the daily global trade. Norway's Equinor ASA (NYSE:EQNR) established itself in Singapore in 1991 and has been involved in trading of crude oil in the Asia Pacific.
7. Canada
Overall Score: 2.87
GDP Ranking: 9
GDP Per Capita Ranking: 12
Economic Freedom Ranking: 16
Advanced Countries Ranking: 14
Canada is quickly emerging as one of the largest tech hubs in the world. Companies like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Amazon.com, Inc. (NASDAQ:AMZN) maintain presence in the country. The Canadian government attracts top talent from the world through its immigration programs. Earlier this year, the government announced to focus on those applicants with STEM backgrounds wishing to immigrate. It ranks as the 14th most technologically advanced country in the world. Canada's nominal GDP is also among the top ten highest in the world; $2.21 trillion in 2022.
6. Germany
Overall Score: 2.95
GDP Ranking: 4
GDP Per Capita Ranking: 19
Economic Freedom Ranking: 14
Advanced Countries Ranking: 9
Germany has the fourth largest economy in the world in terms of nominal GDP, with an output of $4 trillion in 2022. It is Europe's most powerful economy, and ranks among the top 10 technologically advanced countries in the world as well.
Click to continue reading and see the 5 Countries with the Best Economy in the World.
Suggested Articles:
Disclosure: None. 20 Countries with the Best Economy in the World is originally published on Insider Monkey.