Largest City Economies of the World

Topics: Developed country, Economic growth, Gross domestic product Pages: 170 (11426 words) Published: December 17, 2012
III – Which are the largest city economies in the world and how might this change by 2025?
This article updates an article
published in our March 2007 UK
Economic Outlook1 giving estimates
for 2005 and projections to 2020
of the size of the largest 100 city
economies in the world. The updated
analysis and illustrative projections
of GDP for different cities show how
the GDP rankings of cities might
change by 2025 taking into account
the impact of the current economic
downturn and the impact of a
potential de-globalisation scenario.

Figure 3.1 – Global urban and rural population trends and UN projections Population (billions)


This analysis fills this gap and
provides a significantly different
picture from rankings by population,
with the advanced economy cities
ranking much higher by GDP than by
population due to their higher average
income levels. Our analysis also
allows us to consider how far fastgrowing cities in emerging market economies like China, India and Brazil
could challenge the dominance of
current leading global cities such as
New York, Tokyo, Paris and London
by 2025.
The discussion below is organised
as follows:



Rankings of global cities by
population are common, but while
population statistics are important,
they are only part of the story:
leading cities such as London, New
York, Paris and Tokyo are major
economies in their own right, of
a size greater than medium-sized
national economies such as Sweden
and Switzerland. Cities are also
centres of innovation, creativity
and culture, as well as focal points
for government, finance, business
services and corporate headquarters
in their respective countries (and
sometimes also their regions in the
case of financial centres like London
in Europe, or political centres like
Brussels in the EU). However, data
are much less readily available on
the overall size of city economies in
terms of their total output, particularly
outside the OECD countries2.








Source: UN

• Section III.1 provides a long-term
historic perspective on population
trends for the largest global cities
• Section III.2 introduces our approach
and methodology;
• Section III.3 presents and discusses our
estimates of the largest city economies
in 2008;
• Section III.4 presents and discusses
our illustrative projections for how these
rankings might change between 2008
and 2025, with a particular focus on the
rise of emerging economy cities;
• Section III.5 highlights the uncertainties
surrounding our projections and
discusses some of the key factors
underlying the relative growth rates
of city economies;
• Section III.6 considers the potential
impact of an alternative de-globalisation
scenario on the growth rates of city
economies; and
• Section III.7 summarises and draws
conclusions from the analysis.
A more detailed description of the
data and methodology used in the
analysis to estimate the size of city
economies as measured by GDP is
provided in Annex A. This is followed
by a full listing of our rankings of the

largest city economies by GDP in 2008
and 2025 in Annex B.

III.1 Long-term historic
trends in city populations
Urbanisation has been one of the major
global themes of the past century and all
the indications are that major cities will
provide an increasing focus for global
economic activity over the course of this
century. In 1900, there were only 16 cities
in the world with more than 1 million
inhabitants, mostly in the advanced
economies; now there are over 400 such
cities according to United Nations (UN)
estimates, around three-quarters of which
are in low and middle-income countries.
In 1950, the rural population of the world
was around twice the urban population,
but by 2010 the UN estimates that the
urban population will be greater and
by 2030 it projects a total global...
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