The largest economies in the world in 2022 has been forecasted by IMF. The US remains the world’s largest economy, but the Americans are chased by the Chinese. Poland is to approach the top twenty – according to IMF forecasts.
In 2021, the United States retained its reputation as the world’s largest economy. US nominal GDP grew by 10 percent to nearly $ 23 trillion. Even faster, taking into account the appreciation of the yuan against the “green,” China’s GDP converted into the world’s most important currency swelled in the hands of Beijing , and its size is not as correlated with actual, productive economic activity as it is in the US, and that distorts the already imperfect comparisons based on GDP.
According to IMF estimates, the world’s third largest economy, in terms of dollars, has shrunk. The country’s GDP has fallen below $ 5 trillion.
Some movements among the largest economies
The IMF data and estimates show that the top ten of the world’s largest economies in 2020 maintained their positions in 2021. Some changes took place further: Iran moved up to the 14th place, ahead of Spain, Mexico and Indonesia, and Saudi Arabia jumped to 19th place, beating Switzerland and Turkey. Poland maintained its 23rd position.
The IMF predicts that the ranking will be reshuffled this year. Canada is set to leap over Italy, and Brazil is set to leapfrog Russia, South Korea and Australia. Saudi Arabia is to take the next step up. Poland is to move up one step ahead, ahead of Turkey, plunged into the inflationary crisis.
However, the forecasts are subject to high uncertainty. IMF experts have to estimate not only the pace of economic growth, but also the exchange rate of the local currency against the dollar. The difficulty can be clearly seen in the examples of two relegators: Russia and Turkey.
In the case of the latter, economists predict that nominal GDP in the domestic currency will increase by almost 60%, but when converted into dollars – it will shrink by 14%. In 2021, Turkey’s GDP in lira increased by more than 40% and in USD – by 12%, according to IMF data. Meanwhile, the current weakening of the Turkish currency this year is not as decisive as the slump recorded in 2021.
The forecast for Russia raises even greater doubts. Nominal GDP is to increase by almost 15 percent. (drop in real terms by 8.5%), and in terms of dollars, increase by 3%. However, the current forecasts of the ruble exchange rate, and even its current valuation, are highly controversial. Moscow introduced, inter alia, capital control (a sharp reduction in the transfer of funds abroad) and the formal and informal sanctions imposed by the Allies after Russia’s invasion of Ukraine made Russian assets “non-investable”.
As a result, the liquidity in the ruble market is very low and the rate has been manipulated – once the restrictions are lifted, the adjustment to reality can be abrupt. Even if the barriers remain, it is difficult to determine the real price of the Russian currency that is used to calculate the above ranking.
The situation is similar in the case of Iran, where despite over 40 percent. of inflation, the riyal formally remains fixed against the dollar, which pushes up the Persians’ position in the ranking
Poland in G20?
Poland’s promotion to the 22nd position is likely to trigger discussions in Poland about including our country in the G20. The 21st place in the ranking is taken by Taiwan (Republic of China), a country not recognized by the majority of the international community under the pressure of the People’s Republic of China. In 11th place is Russia, which was ostracized by democratic countries after the attack on Ukraine.
However, the size of GDP itself is not the only criterion for belonging to the G20 – the group lacks Spain, the Netherlands, Iran or Switzerland. The entire European Union is represented by the authorities of the community, although at the same time the group includes the largest EU economies: Germany, France and Italy. Nevertheless, Poland could represent the region of Central and Eastern Europe.
In the April issue of the World Economic Outlook, the IMF lowered the forecast of Poland’s GDP growth in 2022 to 3.7 percent. from 4.6 percent predicted in October, and in 2023 to 2.9 percent. from 3.7 percent