Global Economy: $128 Trillion in 2026

 

The world’s economies vary enormously in size, from the United States at over $32 trillion to many countries producing less than $100 billion annually. This visualization breaks down nominal gross domestic product (GDP) by country and region using new forecasts from the IMF’s October 2026 World Economic Outlook. Figures measure annual economic output in current U.S. dollars, converted at market exchange rates.

As the world’s largest economy, the U.S. leads with $32.64 trillion, accounting for approximately a quarter of global GDP. China follows at $21.55 trillion, more than four times the size of Germany’s economy, the world’s third largest. The gap between these two economic superpowers and the rest of the world is striking. The U.S. economy alone is larger than the combined output of Germany, Japan, the U.K., India, and France.

Beyond China and Japan, Asia is home to several other major economies. These include large consumer markets like India ($4.06 trillion) and Indonesia ($1.48 trillion), as well as manufacturing powerhouses like South Korea ($2.25 trillion). Elsewhere, Brazil ($2.65 trillion) accounts for roughly half of South America’s economy, while Australia ($2.11 trillion) contributes most of Oceania’s total output.

Beyond their current size, the world’s largest economies are being shaped by different growth drivers. In the U.S., the AI investment boom is generating demand for servers, software, data centres, and power infrastructure. Training and running advanced models require enormous computing capacity, creating business opportunities for companies supplying and building that infrastructure.

Consumer spending provides another source of growth. The U.S. economy expanded at an inflation-adjusted annualized rate of 2.2% in the second quarter of 2026, with household spending, investment, and exports all contributing to growth.

China’s economy grew 4.6% year over year in the first nine months of 2026, with advanced manufacturing providing a particularly strong source of expansion. High-tech manufacturing output rose 14.3%, alongside rapid increases in the production of industrial robots and lithium-ion batteries. Overseas demand also supported Chinese producers. The country’s trade surplus in goods is on track to surpass $1 trillion again, supported by strong exports of semiconductors and green technologies. These industries connect China’s manufacturing base with customers and businesses around the world.

What about Malaysia? Approximately USD547b, according to IMF. GDP per capita of $15,980 and global rank of 34-35^th largest economy.

 

Reference:

Post by Judah Westreich on LinkedIn, 𝐓𝐡𝐞 $𝟏𝟐𝟖 𝐓𝐫𝐢𝐥𝐥𝐢𝐨𝐧 𝐆𝐥𝐨𝐛𝐚𝐥 𝐄𝐜𝐨𝐧𝐨𝐦𝐲: 𝐄𝐯𝐞𝐫𝐲 𝐂𝐨𝐮𝐧𝐭𝐫𝐲’𝐬 𝐆𝐃𝐏 𝐑𝐚𝐧𝐤𝐞𝐝.

Haze Cost Us RM8 Billion!

 

Malaysia’s recent haze episode carried an estimated RM8 billion in welfare losses. Short-term exposure to fine particles from fires may have contributed to about 1,700 deaths, according to a report commissioned by the Federation of Malaysian Manufacturers (FMM). The report valued the health burden of estimated premature deaths at between RM3 billion and RM15 billion, using standard benefit-transfer methods. It said this represents what people would be willing to pay to avoid the risk of premature death — not lost economic output — and should not be added to other economic losses. 

The haze disrupted manufacturers indirectly through staff absences and school closures. Among 59 sites reporting some operational impact in FMM’s survey, 81 per cent said they experienced more sick leave or health-related absence, while 63 per cent said school closures affected staff availability.

 

Source: https://en.wikipedia.org 

The report also highlighted that, at 14 per cent of affected sites, staff shortages disrupted shifts, production or deliveries. Overall, 37 per cent of sites reporting an impact said output fell, and 27 per cent temporarily shut down at least one operation. 

The survey received responses from 86 FMM member sites, including 81 manufacturers. More than two-thirds reported some operational impact, while 26 per cent said disruption was moderate or significant. The report cautioned that the survey was not representative of all manufacturers; most responses came from Selangor and Penang, and only two came from Sarawak. 

School closures during the haze affected an estimated 8.4 million to 13.4 million student-days, the report said. It did not assign a monetary value to any loss in teaching quality. 

The haze is no longer an environmental issue but also a matter of public health, labour productivity, economic sustainability and regional competitiveness. 

The report estimated 1,700 deaths related to the haze, with a 95 per cent interval of about 1,300 to 2,300, which covers the period from July 1 to Oct 22. About 1,600 were attributed to smoke from fires outside Malaysia, the report said. The report stressed that the figures are statistical estimates of deaths brought forward across the population, not individually identified cases. If fire smoke is assumed to be no more toxic than other fine particles, the estimated toll falls to about 600. The main estimate also carries uncertainty because the health-risk study used did not include Malaysian cities and was based mostly on forest fires rather than peat fires. 

Nevertheless, we need to create a Transborder Commission that can investigate and fine those responsible for the haze. People, animals, productivity and environment suffers from this mindless action by some companies bent on profit. Name them and shame them first! 

Reference:

Malaysia’s latest haze cost RM8b in welfare losses, may have led to 1,700 deaths, report finds, Milad Hassandarvish, Malay Mail, 29 October 2026

Old-Age Dependency Ratios!

 

One of the greatest challenges facing the world's leading economies in the years ahead will be the increase in the share of old-age population that is over the age of 65.  This will result in a major increase in the old-age dependency ratios of many of the world's leading economies, making it harder to generate economic growth without a dramatic increase in productivity growth in the coming years. Likewise, government finances will worsen as the old-age dependency ratio increases.

Malaysia is still in single digit for 2026 and will show double-digits by 2030 and beyond. There is a lot of work to do, a full ministry many need to be set-up! Retirement villages, old-age medical support, new devices for the aged, suitable work for those able and many other initiatives are needed. Right now, it may not be lucrative – perhaps multi-generational condos or living spaces are rewarding transition step for the private sector. But there are so many things to do….!

Reference:

Post by Michael Weidokal on LinkedIn

 

 

Foreign Exchange Reserves: Does it Really Matter?

 

Think of foreign exchange reserves as a country's financial buffer in foreign currency. Central banks hold reserves—such as foreign currencies, monetary gold, SDRs, and other liquid external assets—to help meet external payment needs, support confidence in the financial system, and provide room to respond when financial markets come under stress.

So where does Malaysia stand?

The infographic puts China’s reserves at US$3.41 trillion, compared to others:

🇨🇳 China — US$3.41T
🇯🇵 Japan — US$1.26T
🇹🇼 Taiwan — US$602B
🇮🇳 India — US$543B
🇸🇬 Singapore — US$419B
🇹🇭 Thailand — US$237B
🇮🇩 Indonesia — US$146B
🇲🇾 Malaysia — US$117B
🇵🇭 Philippines — US$92B

At first glance, US$117 billion for Malaysia looks small beside China's US$3.41 trillion. But that's not necessarily the right question. A country doesn't need to have the world's largest reserves.

The more important questions are:

-Are the reserves adequate relative to the country's external obligations?

-Can they provide enough foreign currency when the economy needs it?

-And how resilient is the economy to external shocks?

The size of the reserve is only part of the story. What matters is what that reserve can do relative to the size and needs of the economy. A big reserve is useful. An adequate reserve is what matters. 

 

Reference: 

Post by Thomas Lazaro III on LinkedIn, 

Source: Visual Capitalist, June 25, 2026, based on International Monetary Fund (IMF) IRFCL data and national central bank reports.

 

Ramly Burger: A Model to Follow?

 

MARA rejected his RM7,000 loan. He started anyway with RM2,000 and a knife in a Kampung Baru flat. Today his brand sells over RM1 billion a year. This is the story of Dato' Dr. Haji Ramly bin Mokni and Ramly Burger.

Ramly was born in 1947 in Tanjung Piandang, Perak, the eighth of sixteen children. His family could not afford medical school, the only dream he had. He followed his brother to Kuala Lumpur, worked as a labourer, then as a butcher and meat cutter in a supermarket. One day, a customer asked whether any burger patties in the supermarket were made by a Bumiputera. Ramly understood what was behind it: trust and halal certainty. In the late 1970s, the halal status of imported patties was genuinely uncertain. He decided to make the patties himself, halal from the start, seasoned for Malaysian taste. His wife, Shala Siah binti Abdul Manap, was his equal partner from the first conversation.

When MARA rejected his loan application, he did not argue. With RM2,000 in savings, the couple made 200 patties a day by hand in their flat on Lorong Haji Hussein, Kampung Baru. The response was nothing spectacular. Malaysians were not yet burger people. Ramly concluded it was his job to introduce them.

He opened a stall near Chow Kit and sold cooked burgers and uncooked patties side by side. Every cooked burger advertised the patties; every packet advertised the burger. He spent weeks refining the seasoning for the local palate. Today, Ramly produces six million patties a day and is found in supermarkets, pasar malam and street corners across Malaysia.

A closed door did not end Ramly's story. He listened to one customer's question, solved a real need, and kept going when the early response was flat. Not every child's path runs through the dream they started with. What matters is building the resilience and resourcefulness to create a new one. 

 

Reference:

Post by Harry Seggu on LinkedIn

 

1995 vs 2025: The Global Economic Rankings

 

The chart below shows a dramatic shift in the world’s economic balance over the past three decades. In 1995, Japan held nearly 18 per cent of global GDP, Europe commanded three of the top five positions, and China accounted for just 2.36 per cent. Fast forward to 2025 and the landscape is unrecognisable. The United States has expanded its global share to 26.84 per cent, China has surged to 16.92 per cent, and Europe’s collective weight has declined sharply as demographic pressures and slower productivity gains take their toll.

A longer historical view helps explain this transformation. Periods of rapid geopolitical and technological change often trigger major shifts in economic leadership. The post-war rise of Japan, the American technology boom of the 1990s, and China’s WTO accession in 2001 all reshaped global growth trajectories. Today’s transition is driven by different forces: the divergence in demographic momentum, the concentration of high-value innovation in the United States, the scaling of China’s industrial capacity, and the relative stagnation of key European economies.

For investors, the implications extend well beyond GDP rankings. Shifts in global economic share influence capital flows, valuation regimes, and long-term return expectations. Markets with rising global footprint tend to attract more persistent capital inflows, enjoy stronger currency dynamics, and generate higher earnings growth over time. Conversely, countries losing global share often face tighter fiscal constraints, weaker productivity trends, and greater political friction.

None of this argues for simple regional bets, but it does suggest that the next decade will reward investors who align portfolios with structural momentum rather than legacy assumptions. The global economy is becoming more concentrated, more competitive, and more sensitive to innovation cycles. As the dominance of the United States and China grows, and as India edges upward, relative performance among major regions is likely to diverge further.

Reference:

Post by Jonathan Baird on LinkedIn, 1995 vs 2025: The Global Economic Rankings that every investor should study

Why Can’t We Use Palm Oil as Fuel?

 

While Malaysia sits on large palm oil stockpiles (exceeding 3m tonnes), the decision not to aggressively funnel it into car fuel is driven by a mix of stalled infrastructure, powerful export economics, technical limitations, and policy inertia. 

Palm oil is already used in biodiesel, but the scale is deliberately constrained. 

1.    The Infrastructure Bottleneck 

The most immediate hurdle is that Malaysia simply cannot physically blend higher concentrations of palm biodiesel fast enough. The nationwide standard remains B10 (10% palm biodiesel, 90% diesel), while the planned upgrade to B20 has largely stalled. Former minister Teresa Kok noted that critical depots in Bintulu, Sandakan, Tawau, and Kota Kinabalu lack sufficient blending capacity or are awaiting upgrades. Rolling out higher blends requires synchronized upgrades across feedstock supply, quality control, and logistics—a costly and slow process the government has been hesitant to fully fund.

 

https://simple.wikipedia.org/wiki/Biodiesel 

 

2.     Export Revenue vs. Domestic Fuel 

Malaysia produces roughly 20 million tonnes of palm oil annually. Only about 1 million tonnes currently goes to biodiesel, while 15–16 million tonnes are exported, generating massive foreign exchange (palm product exports hit RM112.4 billion in 2025). Using that stockpile domestically for fuel would mean sacrificing high-value export revenue. Furthermore, high Crude Palm Oil (CPO) prices (frequently above RM4,000/tonne) make biodiesel expensive relative to fossil diesel, often requiring subsidies or tax waivers that strain government finances.

 

3.    Technical & Engine Limitations 

Palm biodiesel has poor cold-flow properties due to its high saturated fat content. It can congeal at low temperatures, which is why Malaysia restricts biodiesel to B7 in highland areas while allowing B10/B20 in the lowlands. Additionally, some auto-manufacturers have historically objected to higher palm biodiesel blends due to concerns over long-term engine fouling and viscosity issues. These technical constraints make a rapid, nationwide shift to high blends less straightforward than simply burning the stockpile.

 

4.    Supply Chain & Economic Factors 

Refining into Biodiesel: Palm oil must first be processed into Palm Oil Methyl Ester (PME) or biodiesel rather than used raw. 

Blending Limits: Malaysia implements controlled blending (such as B10, B15, and rising targets) to balance engine safety, vehicle manufacturer approvals, and supply chain readiness before pushing toward higher mixtures like B20 or full B100 pilots. Our R&D is not yet scaled up to meet higher mixtures hence the low blending levels.

 

5.    Policy & Strategic Priorities 

The government has chosen to prioritize energy exports and food security over aggressive domestic fuel substitution. Palm oil is a strategic export commodity, and policies like the National Energy Transition Roadmap (NETR) are now channelling investment toward advanced biofuels (like Sustainable Aviation Fuel) rather than just road transport biodiesel. There is also a "food vs. fuel" tension, as palm oil is a staple cooking ingredient, and diverting too much to fuel could drive up domestic food costs. 

In short, the 3+ million tonnes in storage reflects a surplus of a valuable export commodity, not a free pool of fuel waiting to be burned. Until the blending infrastructure is upgraded, the price gap is closed, and engine compatibility is fully addressed at scale, Malaysia will likely continue to treat palm oil primarily as an export earner rather than a primary motor fuel.