In this article, we will look at the 25 Largest Economies in the World by 2040.
In the long term, economic growth can be affected by several metrics including GDP growth, inflation, interest rates, unemployment rates, and productivity growth. In contrast, other factors which can impact economic growth are government policies, technological trends, political stability, and global economic conditions, among many others. The current global economic scenario faces geopolitical risks and trade wars. Two of the largest economies in the world, the United States and China are once again up against each other in a trade war.
Two of the Largest Economies in the World
In 2024 so far, the U.S. economy has improved considering the abating fear of recession and the Fed cutting rates in September. The US stock market has been the top performer with the S&P 500 index soaring over 27% year-to-date, as of December 2. At the same time, the Nasdaq Composite, Russell 2000 Index, and Dow Jones Industrial Average have surged over 31%, 20%, and 18%, respectively. On average these four leading indexes have soared more than 24% in 2024. Historically, the U.S. stock market is trading at its all-time high, which reflects the U.S.’s dominance in each sector globally.
China on the other side has released a stimulus of almost $1.4 trillion to support its economy. Speculation is brewing that Chinese authorities will announce another stimulus ahead of the Central Economic Work Conference scheduled on December 11 and 12. “There are all sorts of rumours flying around in Chinese social media,” said Nigel Peh, a fund manager at Timefolio Asset Management in Singapore. Peh further added that based on speculations the authorities could launch a stabilization fund, a reduction in the required reserve ratio, and an addition of housing prices to local governments’ performance metrics.
Trump’s second tenure will begin another trade war as the President-elect has threatened China alongside other BRICS countries with a whopping 100% increase in tariffs. Trump has threatened BRICS with high tariffs if they plan to launch an alternative currency to the U.S. dollar. The global trade war could lead to several economic turmoils such as high consumer costs, supply chain disruptions, increase in unemployment, and currency fluctuations – all leading to slow economic growth.
Also see 50 Largest Economies in the World in 2024 and 25 Fastest Growing Economies in the Last 50 Years.
Economic Outlook by 2040
According to research by Goldman Sachs, the world’s fastest years of economic growth have likely already passed. The increasing geopolitical tensions, decline in population growth, and climate change are among the main factors affecting the global economy. In addition to that, extreme poverty and wars are affecting developing economies, and if you want to know which global economies are declining the fastest (See here: 16 Fastest-Declining Economies in the World in 2024).
According to the IMF’s GDP forecast for 2030, 16 Asian countries will be among the largest economies. China, India, Indonesia, and Japan will be among the top six economies by 2050. Goldman Sachs expects the global economy to grow at an average of 2.8% annually between 2024 and 2029. In the decade before the global financial crisis, economic growth averaged around 3.6% and 3.2% in the decade before the COVID-19 pandemic.
Despite the global economic growth expected to slow down, emerging economies will keep on growing more swiftly than developed economies. Asian economies will dominate in the coming years with China, India, and Indonesia leading the economic race. “We expect that the weight of global GDP will shift (even) more towards Asia over the next 30 years,” according to economists at The Goldman Sachs Group.
Technological advancements will be key to economic growth in the coming years. As per McKinsey, 18 potential arenas could generate between $29 trillion and 48 trillion in revenues by 2040. These arenas include AI software and services, cybersecurity, air mobility, drugs for obesity and related conditions, nonmedical biotechnology, and robotics. These sectors could generate between $2 trillion to $6 trillion in profit by 2040 and their collective share of the global GDP could potentially increase from 4% in 2024 to between 10% to 16% by 2040.
An expansive view of the cityscape, showing the impact of the company’s activities in China.
Our Methodology
To identify the largest economies in the world by 2040, we compiled the data from the Global Economics Paper The Path to 2075 published by Goldman Sachs. The paper published by Goldman Sachs ranks economies based on estimated real GDP for 2040. The largest economies in the world by 2040 are ranked in descending order of their Real GDP forecast for 2040. For the countries with similar forecasted real GDP in 2040, we used Population as a tie-breaker. We collected population data from the United Nations Department of Economic and Social Affairs Population Division. To cross-check and minimize the room for subjectivity, we also referred to forecasts made by the IMF and PwC for the biggest economies in the world in 2028 and 2050, respectively.
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25 Largest Economies in the World by 2040
25. Malaysia
Real GDP Forecast (2040): $1.2 Trillion
Population Forecast (2040): 39,279,000
Malaysia is one of the largest economies in Asia. Sustained rapid and inclusive economic growth for half a century has helped Malaysia reach closer to the threshold of high-income status. Malaysia is expected to be the 25th largest economy in the world by 2040.
24. Thailand
Real GDP Forecast (2040): $1.2 Trillion
Population Forecast (2040): 70,916,000
Thailand, another leading economy in Asia, is a well-developed country with sustained economic development. Thailand’s major economic sectors including agriculture, manufacturing, tourism, service and natural resources add to its growth each year.
23. Philippines
Real GDP Forecast (2040): $1.4 Trillion
Population Forecast (2040): 145,022,000
The Philippines is one of the most dynamic economies in East Asia. The country’s economic growth is based on a large and young population and strong consumer demand. In addition to that, a vibrant labour market and robust remittances each year significantly support GDP growth. The Philippines ranks among the largest economies in the world by 2040.
22. Poland
Real GDP Forecast (2040): $1.5 Trillion
Population Forecast (2040): 37,043,000
Poland is one of the strongest economies in Europe driven by a well-diversified economic structure, integration into regional value chains, macroeconomic stability, a robust financial sector, and tight labour markets. Poland is expected to be among the top 25 largest economies in the world by 2040.
21. Nigeria
Real GDP Forecast (2040): $1.6 Trillion
Population Forecast (2040): 320,780,000
Nigeria will be one of the fastest-growing economies in the next 80 years, based on the projections. One of the major concerns for the country would be its high poverty rate.
20. Pakistan
Real GDP Forecast (2040): $1.6 Trillion
Population Forecast (2040): 322,596,000
Pakistan is facing serious political issues and the instability in its politics makes it vulnerable to economic growth. However, as one of the largest populated countries in the world, Pakistan is expected to be among the top 25 largest economies in the world by 2040.
19. Bangladesh
Real GDP Forecast (2040): $1.7 Trillion
Population Forecast (2040): 196,526,000
Bangladesh has gone through a political shift and is now stable with its new government. Bangladesh’s economy is highly based on its textile imports, which continues to help the country to be on track to becoming one of the largest economies in the world by 2040.
18. Egypt
Real GDP Forecast (2040): $1.9 Trillion
Population Forecast (2040): 143,423,000
Egypt has significant potential to leverage its existing manufacturing and services sectors, a large domestic market, and a key strategic location as it is a gateway to Africa, Asia, and Europe.
17. Türkiye
Real GDP Forecast (2040): $2.2 Trillion
Population Forecast (2040): 93,058,000
Türkiye is one of the leading economies in the world and its real GDP is expected to reach $2.2 trillion by 2040. With a mix-economy of developing and upper-middle income, Türkiye is projected to be one of the largest economies in the world by 2040.
16. Australia
Real GDP Forecast (2040): $2.3 Trillion
Population Forecast (2040): 30,356,000
Australia is one of the fastest-growing economies in the world. Strong financial and insurance services, technologies, and high-value-added manufactured goods industries add value to the country’s economy.
15. Saudi Arabia
Real GDP Forecast (2040): $2.4 Trillion
Population Forecast (2040): 44,881,000
Saudi Arabia is diversifying its economy with large-scale investment across various sectors including tourism, sports, entertainment, and real estate, among others. Saudi Arabia’s GDP is expected to reach $2.4 trillion by 2040 and rank 15th among the largest economies in the world.
14. South Korea
Real GDP Forecast (2040): $2.6 Trillion
Population Forecast (2040): 49,320,000
South Korea is one of the largest economies in Asia and it is expected to be among the top 15 largest economies in the world by 2040. South Korea’s economy is a highly developed mixed economy with a key focus on exports.
13. Italy
Real GDP Forecast (2040): $2.7 Trillion
Population Forecast (2040): 55,258,000
Italy is one of the largest economies in the European Union. Similar to South Korea, Italy has an export-oriented economy.
12. Canada
Real GDP Forecast (2040): $2.8 Trillion
Population Forecast (2040): 43,823,000
Canada is one of the largest economies in the world and will continue to be one in the future. Canada’s economy is a highly developed mixed economy backed by industries including real estate and rental and leasing, manufacturing, mining and oil and gas extraction, and finance and insurance.
11. Mexico
Real GDP Forecast (2040): $3 Trillion
Population Forecast (2040): 141,055,000
Mexico will be the second-largest economy in South America by 2040. Mexico will always hold a key trade position with the U.S. and Canada.