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The combined economies of all the countries of the world also called the global economic system. It is important for the private investor to develop a view on the state of the world economy and its likely future direction. There are certain primary factors which impact on the world economy such as the political relationships between countries, the rapid advance of technology, the levels of poverty in third world countries, climate change and the shift towards renewable energy, and more recently global pandemics. When the world economy is booming, commodity prices tend to rise and vice versa. The level of world inflation is a critical element in the mix and the oil price has been a key determinant of world inflation for many decades. Oil is gradually being replaced by renewables and this process will gain momentum once the internal combustion engine is inevitably replaced by an electric motor powered by batteries. The spread of the internet and smart phones is impacting every aspect of life and creating new productivity gains in almost every industry. The growth of robotics will add a whole new layer of productivity. Population growth rates have been slowing for the last 50 years - a trend which looks set to continue as populations become better educated and wealthier. The largest economy in the world in 2020 was the US with a GDP of $21,44 trillion, followed by China with a GDP of $14,14 trillion, then Japan with a GDP of $5,15 trillion. The European Union had a GDP of $18,8 trillion. The whole world's GDP was about $142 trillion.

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