A child runs past a mural depicting health care workers wearing face masks along a street in New Delhi, India on March 21, 2021.
Sajjad Hussain | AFP | Getty Images
SINGAPORE – The Covid-19 pandemic rocked the ranking of the world’s largest economies after plunging many countries into their worst economic recessions in recent history.
The United States, China, Japan, and Germany continue to occupy the top four places as the largest economies in the world. However, some rankings have shifted as a result of the pandemic, while one country fell off the top 10, according to CNBC analysis by the International Monetary Fund, according to the fund’s economic forecasts.
CNBC compared nominal gross domestic product in US dollars in different countries listed in the IMF’s World Economic Outlook database.
Nominal GDP estimates the market value of all manufactured goods and services produced in an economy, but does not take into account changes in price levels or inflation – and can therefore overestimate or underestimate real economic value.
However, nominal GDP values denominated in a common currency are a way to measure and compare the economic sizes of different countries and provide insight into how developments – like the pandemic – are affecting economies differently.
Here are the key changes in the ranking of the 10 largest economies in the world before and after the Covid outbreak.
India is falling behind Great Britain
India, which became the fifth largest economy in the world in 2019, slipped to sixth place behind Great Britain last year.
According to CNBC’s analysis of the IMF data, the South Asian country would not regain fifth place in the global economic ranking until 2023.
India was hit by strict lockdowns last year as the country struggled to contain the coronavirus. The IMF forecast an 8% decline in the economy for the fiscal year ending March 2021.
While the fund expects India to grow 12.5% in the current fiscal year ending March 2022, some economists have warned that the recent surge in Covid cases could dampen the country’s outlook. India overtook Brazil last week to become the second worst infected country in the world, only behind the US
“We are even more concerned that rising Covid 19 cases are putting our still flat recovery at risk,” Bank of America economists wrote in a report on Monday.
Economists estimated that a month of nationwide lockdown – if re-imposed – would save 100 to 200 basis points of annual Indian GDP.
Brazil falls out of the top 10
Brazil rose from the ninth largest economy in 2019 to the twelfth largest last year and became the only country to fall out of the top 10 rankings.
The South American country would stay out of the 10 largest economies in the world until at least 2026 – the most distant IMF projection, according to the CNBC analysis.
Brazil has reported the third highest number of Covid cases and the second highest death toll worldwide. But President Jair Bolsonaro, who downplayed the virus threat, has repeatedly refused to impose a national lockdown to contain the coronavirus.
The Sao Paulo health minister reportedly wrote to the federal government warning of an “imminent” collapse of the state health system. while economists said the Brazilian economy would struggle to recover.
The economy shrank by 4.1% last year and, according to the IMF, is expected to grow by 3.7% by 2021.
South Korea enters the top 10
After Brazil was eliminated from the 10 largest economies in the world, South Korea moved up to 10th place and is expected to stay there until at least 2026, according to CNBC analysis. The IMF’s data projection was only available until 2026.
South Korea was one of the earliest countries outside of China to report cases of Covid-19 in early 2020. The country had some success in containing the virus over the past year, which – along with strong semiconductor exports – helped its economy shrink a modest 1% in 2020.
Consumption has also become increasingly resilient to virus outbreaks, partly due to the increase in online shopping. However, hospitality and relaxation remain very weak.
The number of new infections every day rose this month, forcing authorities to extend social distancing measures, including restricting large gatherings until early May.
Despite the uncertainty about viruses, the country’s manufacturing and export sectors remain strong, economists at consulting firm Capital Economics said in a report last week.
“Consumption has also become increasingly resilient to virus outbreaks, partly due to the increase in online shopping. However, hospitality and recreation remain very weak,” they added.
The IMF predicts that the South Korean economy could grow by 3.6% this year.