In this piece, we will take a look at the 20 Countries with the Best Economy in the World in 2024. If you want to skip our coverage of the current state of the global economy, then you can read 5 Countries with the Best Economy in the World in 2024.
If there’s one thing that can be said with certainty, it’s that the global economic environment is far different in 2024 than it was in 2020. The world before the onset of the coronavirus pandemic was completely different. Back then, oil investors were fretting as green energy stocks were rising in popularity, high growth sectors were booming due to moderately low interest rates, and the stock market was dominated only by professional investors.
Now, with interest rates all over the world coming down from historically high levels and the shakeup in global energy supply chains after the Russian invasion of Ukraine, not only have green energy stocks struggled, but high growth stocks (except for those with exposure to artificial intelligence) have also left investors desiring for more. These trends come after massive fluctuations in global GDP growth. During 2020, the global economy contracted by 2.9% which was the sharpest contraction on record since 1961 shows data from the World Bank. This outpaced the 1.4% drop in 2009, and after the lax monetary policy and stimulus spending were introduced in 2020, the economy sharply recovered in 2021 and stood at 6.3%.
However, this was short lived since the Russian invasion of Ukraine would further complicate the economic picture in 2022. Stimulus spending and low rates fuel inflation, which was exacerbated by the disruption in the energy supply chain stemming from the invasion. In 2022, global GDP growth slowed down to 3.5% and slipped to 3.3% in 2023.
Of course, since calculating global GDP growth is no small task, estimates of the metric often differ. So while the World Bank estimates 2023’s GDP growth at 2.7%, estimates from the IMF and OECD share that it was 3.3% or 3.1%, respectively. However, while their estimates are slightly different, the one thing that the IMF and OECD agree on is that 2024 won’t shock anyone by providing a growth uptick. Both claim that in 2024, global GDP growth will remain static and similar to 2023’s figures. According to the OECD, while interest rates have made their mark on the housing and credit markets, overall, the global economy is continuing to show resilience, with inflation dropping and business confidence continuing to improve. Consequently, it estimates that the world GDP will grow by 3.2% in 2023 – which is similar to the IMF’s figure.
Additionally, among the list of the world’s strongest economies called the G20, only Japan and Argentina are expected to post negative growth in 2024. India will lead the world with its 6.7% annual growth, with Indonesia and China following in second and third places by posting 5.1% and 4.9% in GDP growth. In 2025, the OECD expects that India and Indonesia will continue to lead the world, and the Japanese economy will rebound through its 1.4% growth. The US GDP though is expected to slow down from 2.6% in 2024 to 1.6% in 2025. Some of the OECD’s caveats to this cautious optimism are a slower Chinese economy on the back of continued troubles in real estate and persistent inflation that forces central banks to keep policy rates high.
READ ALSO: 50 Biggest Economies in the World by the End of 2024 and Top 30 Largest Economies in the World by 2075.
The IMF, for its part, expects global inflation to drop from 6.7% in 2023 to 5.9% this year and 4.5% in the next. However, overall inflation will take some time to return to levels that central banks would prefer. As per the IMF, “inflation in prices for services is now expected to be more persistent and commodity prices higher.” Yet, the fund remains optimistic, as it adds that “the gradual cooling of labor markets, together with an expected decline in energy prices, should bring headline inflation back to target by the end of 2025.”
Shifting gears, GDP growth affects firms that are reliant on discretionary spending for their revenue. These range from those that sell home improvement equipment to others that sell sports apparel. One such firm is the home improvement products retailer The Home Depot, Inc. (NYSE:HD). Due to its focus on the construction industry, the firm benefits when homeowners and builders find it easy to spend on either new projects or renovations. This spending is dependent on inflation and interest rates, as they affect consumer budgets and developer financing. Consequently, when the Fed announced a 50 basis interest rate cut on September 18th, the firm’s shares have gained 5.5% since then. Naturally, since the rate cut is fresh, year to September The Home Depot, Inc. (NYSE:HD)’s stock didn’t perform well despite the fact that it is one of the biggest home improvement retailers in America. Its shares were up a modest 6.8% by then, and a modest 14.4% over the past twelve months to lag the broader S&P by roughly 14 percentage points.
The Home Depot, Inc. (NYSE:HD)’s earnings for its first quarter saw same store sales drop for the sixth consecutive quarter. This was despite the fact that there have been no notable firm specific developments over the period, which led analysts to conclude that the drop is purely due to macroeconomic factors. During Q2, comparable sales fell by 3.3% annually for the seventh consecutive quarter as management shared that rate cut expectations were making buyers delay their spending. However, compared to its major competitor in the home improvement retail market, The Home Depot, Inc. (NYSE:HD) enjoys gross margin advantages. The firm’s $152 billion in revenue and $51 billion in gross profit for the four latest quarters lead to a gross margin of 33.6%, which is higher than the rival’s 33.2%.
This is despite the fact that the latter firm earned $84 billion in revenue and $28 billion in gross profit during the same period. With September 2023 ending with the much awaited interest rate cut, Piper Sandler shifted its sentiment for The Home Depot, Inc. (NYSE:HD)’s shares as it increased the share price target to $455 from $387 and kept an Overweight rating on the shares. At the heart of the bullishness was a 136% annual jump in September refinance applications as 30 year mortgage rates dropped from 6.35% to 6.08%. The analysts shared that the anticipated growth in home improvement spending made HD quite an attractive stock. For more stocks that benefit from an uptick in economic growth, you should check out the 10 Best Consumer Cyclical Stocks To Buy Now.
While we acknowledge the potential of HD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
With these details in mind, let’s take a look at the best economies in the world in 2024.
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Our Methodology
To make our list of the best economies in the world in 2024, we started by making a list of the 40 countries with the highest GDP per capita. They were ranked by their latest real GDP growth rates, and the top 20 countries with the highest growth were selected and re ranked using their nominal GDP. Using per capita figures and GDP size refines the list since it removes emerging or small economies that might have high growth but smaller economic size. If you’re interested in the fastest growing economies, you should check out 20 Countries with the Highest Annual GDP Growth in the World to understand how the fastest growing economies might not necessarily be the best.
20. Andorra
GDP Growth: 1.80%
GDP Value: $3.9 billion
GDP Per Capita: $44,900
Andorra is one of the smallest countries in the world as it covers an area of 467 square kilometers. Its economy is based on a large part of its geography, as Andorra’s ski resorts attract a large number of visitors every year to allow it to generate tourism revenue. Additionally, Andorra is a low tax region which allows its banking sector to attract global capital.
19. Brunei
GDP Growth: 2.40%
GDP Value: $15.5 billion
GDP Per Capita: $35,111
Brunei is a Southeast Asian country which is another small nation due to its area of 5,765 square kilometers. It is a natural resource rich nation, which relies on oil for most of its exports. Brunei has used its wealth well, as unlike some oil rich countries, it has managed to significantly improve its living standards.
18. Malta
GDP Growth: 5%
GDP Value: $22.7 billion
GDP Per Capita: $41,740
Malta is a small European island nation with an area of 316 square kilometers. Despite this, it has a sizeable GDP of $22.7 billion which lends it a high GDP per capita of $41,740. Its location helps Malta benefit from the tourism industry, and the country also plays a key role in the global shipping industry.
17. Iceland
GDP Growth: 1.50%
GDP Value: $33.3 billion
GDP Per Capita: $84,590
Iceland is the only island Nordic European nation and also one of the least populated countries in the region. A vibrant services industry as well as a developed tourism sector allow Iceland to have a sizeable $33.3 billion economy. Coupled with its population of roughly four hundred thousand inhabitants, Iceland has a GDP per capita of $84,590.
16. Cyprus
GDP Growth: 2.70%
GDP Value: $34.2 billion
GDP Per Capita: $37,150
Cyprus is a small island country in the Mediterranean Sea. It has one of the highest GDP per capita in Southern Europe, and its island status also allows it to be one of the biggest ship management countries in the world. Merchant navy companies have a sizeable presence in Cyprus, and it also benefits from more than a million tourists visiting it every year.
15. Bahrain
GDP Growth: 3.60%
GDP Value: $46.8 billion
GDP Per Capita: $28,880
Bahrain is another small island nation. Located in West Asia, it is part of the region that is dubbed the Middle East. Bahrain is made of close to a hundred natural and artificial islands. It benefits from a vibrant tourism industry, becoming another nation that has tried to shift its economy away from natural resources to other, sustainable avenues.
14. Slovenia
GDP Growth: 2%
GDP Value: $72.1 billion
GDP Per Capita: $34,030
Slovenia is a Central European nation with a population of 2.1 million and a GDP per capita of $34,030. It has one of the highest GDP per capita in the Slavic region, which is fueled by a highly industrialized economy with vibrant manufacturing and engineering sectors.
13. Qatar
GDP Growth: 2%
GDP Value: $244.7 billion
GDP Per Capita: $81,400
Qatar is another small Middle Eastern nation that has managed to become an economic giant due to its vast natural resources. Its liquefied natural gas (LNG) industry soared in the wake of the Russian invasion of Ukraine, and Qatar has used its money to invest in companies spread worldwide. Additionally, its GDP per capita of $81,400 is among the highest in the world.
12. Portugal
GDP Growth: 1.70%
GDP Value: $298.9 billion
GDP Per Capita: $28,970
Portugal is a Southwestern European country that is among the most developed nations in the world. It has one of the highest GDP per capita in Europe, and a vibrant tourism industry allows Portugal to attract tens of millions of visitors annually. The services industry, fueled by mega retailers is another key contributor to the Portuguese economy.
11. Denmark
GDP Growth: 2.10%
GDP Value: $409.9 billion
GDP Per Capita: $68,900
Denmark is one of the most developed countries in the world and it enjoys high standards of living since it follows the Nordic model. Denmark also has a very well diversified economy, and companies like the wind power generation equipment provider Vestas, beer company Carlsberg, and pharma giant Novo Nordisk are some notable Danish corporate giants.
10. Singapore
GDP Growth: 2.10%
GDP Value: $525.2 billion
GDP Per Capita: $88,450
Singapore is one of the most developed and wealthiest countries in the world. Not only does it house some of the highest numbers of millionaires in the world, but its location also lets Singapore play a crucial role in the global oil industry. Favorable tax regulations have also contributed to a robust banking sector in the country.
9. Norway
GDP Growth: 1.50%
GDP Value: $526.9 billion
GDP Per Capita: $94,660
Norway is the highest ranking Nordic country on our list of countries with the best economy. It is an economic powerhouse, with its $526 billion GDP powered by a sizeable oil industry and a highly regulated business environment. Norway is also seeking to diversify from its dependence on oil and has focused on biotechnology and cancer research as a result.
8. United Arab Emirates
GDP Growth: 3.50%
GDP Value: $527.8 billion
GDP Per Capita: $53,920
The UAE is a group of emirates in Asia that is well known as a global tourism, finance, and exporting hub. This is the result of years of policies that have sought to diversify its economy, and the Emirate of Dubai is a tourism destination for the world’s wealthiest.
7. Israel
GDP Growth: 1.60%
GDP Value: $530.7 billion
GDP Per Capita: $53,370
Israel is one of the most technologically advanced nations in the world and is known worldwide for its high concentration of wealth. The country has some of the highest number of billionaires in the Middle East, as well as high levels of wealth per capita. The Israeli economy is fueled by diamonds, consumer goods, and oil with dozens of companies listed on American exchanges.
6. Ireland
GDP Growth: 1.50%
GDP Value: $564 billion
GDP Per Capita: $106,060
Ireland is a European country that has the highest GDP per capita on our list at $106,060. The Irish economy is fueled by multinationals using the country as their base of operations. Its economy is also closely tied to Northern Ireland, despite the latter being a part of the United Kingdom.
5. Taiwan
GDP Growth: 3.10%
GDP Value: $802.9 billion
GDP Per Capita: $34,430
While the status of Taiwan as a country is disputed, and it is often considered a part of China, its sheer economic heft makes it a mandatory entry on our list. Taiwan’s economy sits at a whopping $802.9 billion, and its 3.1% growth rate makes it the fourth highest ranking Asian country on our list in terms of growth. Key to Taiwan’s prosperity is the electronics industry, as it is the hub of global semiconductor fabrication.
4. Saudi Arabia
GDP Growth: 2.60%
GDP Value: $1.1 trillion
GDP Per Capita: $33,040
Saudi Arabia is the final West Asian country on our list. Its $1.1 trillion economy is powered by oil, as Saudi Arabia is the backbone of the global oil industry. Saudi Aramco, the state owned oil company, is the largest of its kind in the world, and the Saudi government finances a large portion of its budget from Aramco’s dividends.
3. Spain
GDP Growth: 1.90%
GDP Value: $1.65 trillion
GDP Per Capita: $34,050
Spain is the final European country on our list. A former colonial power, the automotive industry plays an important role in the country. Spain has the second largest automotive industry in Europe after Germany, and it also benefits from tens of millions of tourists visiting it each year.
2. South Korea
GDP Growth: 2.3%
GDP Value: $1.76 trillion
GDP Per Capita: $34,165
South Korea is another global leader when it comes to technological advancement. Its economy is dominated by key sectors such as heavy industrial manufacturing, automobiles, and electronics. South Korean firms like Samsung are global economic giants, and it has managed to keep a strong 2.3% GDP growth rate despite the size of its economy.
1. United States of America
GDP Growth: 2.70%
GDP Value: $28.7 trillion
GDP Per Capita: $85,370
America’s $28.7 trillion GDP is 3x the times of all other GDPs on our list combined. The total value of the ex-USA economies in our list of the best economies in the world is roughly $9.1 trillion, which isn’t even half of the American output. America’s economic crown jewel is its technology industry, as it houses all of the world’s biggest technology companies. These firms have also led the world in the ongoing AI revolution, and the US’s financial hub of Wall Street sets the tone for the global industry. American universities are among the best in the world, and its defense industry is the envy of dictatorships and repressive regimes who are often willing to go to extreme lengths to have a chance to enjoy the technological advantage that makes the US military the most formidable in the world.
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Disclosure: None. 20 Countries with the Best Economy in the World in 2024 was originally published at Insider Monkey. All investment decisions should be made after consulting a qualified professional.
