Cheap gasoline. More jobs. Rising confidence. Everything’s coming up roses for U.S. consumers, whose spending fueled the strongest growth since 2003. The gross domestic product grew at an annual rate of 5.0% in the July-September quarter, according to the third estimate of growth, released recently by the Bureau of Economic Analysis.

The GDP report and other economic data led economists to raise their estimates for the end of 2014 and 2015. “The clear strengthening in activity towards the end of 2014 may prompt some Fed officials to consider whether they need to raise rates before the middle of 2015,” Paul Dales, a senior U.S. economist for Capital Economics, wrote in a client note.

Bloomberg’s Consumer Comfort Index, a weekly pulse-taking, hit its highest level since before the 2007-09 recession in the second week of December. In the GDP report, the pace of consumption growth was revised upward a full percentage point, to 3.2%. In a separate report, the government said inflation-adjusted personal spending rose faster than expected in November, pointing toward the possibility that consumption spending could rise even faster in the fourth quarter—possibly 4% annualized, Dales wrote. (Economists’ revised estimates for fourth-quarter GDP growth are in the range of 3.0%.)

The news today wasn’t all good, though. While business investment was strong in the third quarter, another report issued on the decline in business orders for durable goods in November indicated that businesses aren’t as enthusiastic as consumers are. “Today’s U.S. reports exacerbated the dichotomy between improving consumer prospects but a downgraded factory and mining outlook in the face of plunging oil prices,” Action Economics wrote in an analysis of the data.

Consumers’ good mood wasn’t reflected in the real estate market, in which sales of new homes dropped by 1.6% in November from October, possibly affected by harsh weather for house shopping. That followed a report of a 6.1% monthly decline in existing home sales in November.

The plunge in oil prices reduces the amount of money Americans spend on gasoline, which by itself is a negative for the GDP. But consumers aren’t putting their gas savings in the bank. The savings rate, rather than rising, dipped to 4.7% in the third quarter, from 5.1% in the second. The money that would have been spent on gasoline was apparently spent on other things, buoying personal consumption.

Brazil

In a bid to regain investors’ trust, the Brazilian government revised down its forecast of GDP growth for 2015 from 2 to 0.8%, a figure that is more in line with market analysts’ forecasts.

According to the bill that the Brazilian government sent to Congress, economic growth will pick up only in 2016, when GDP is expected to grow 2% and then 2.3% in 2017.

Economists expect the Brazilian economy to grow just 0.2% this year after entering recession in the first half of 2014.

Analysts agreed yesterday that the revision responds to the government’s aim to bolster its fiscal credibility by using more moderate economic growth estimates to set future savings goals. A weekly survey of economists carried out by the Central Bank showed that experts believe the economy will grow 0.77% next year.

Local media praised the use of more “realistic” figures to craft the 2015 budget. The government’s estimates regarding GDP growth had been too optimistic in past few years, resulting in inflated budgets. Because expected results weren’t achieved and spending wasn’t cut accordingly, it led to deficits in Brazil’s external accounts.

The country posted a current account deficit of US$8.131 billion in October, the largest-ever for that month, Central Bank data showed last week. The Central Bank expects a current account deficit of US$8 billion in November, its head of research, Tulio Maciel, told reporters in Brasilia.

Brazilian media said yesterday that incoming Finance Minister Joaquim Levy — reputed as a fiscal hawk — pushed for the use of private economists’ estimates, in a major shift for an administration that had previously adopted rosy forecasts to calculate fiscal targets.

“These are not magic numbers that we just pulled out of a hat,” a Brazilian official, who requested anonymity to speak freely, told Reuters. “These are numbers from the market to show everyone that we are working with credible goals.”

Levy will likely take office next week once the dust settles on Rousseff’s battle to loosen this year’s budget targets, another senior government official said earlier yesterday.

In a heated 17-hour joint session, Congress approved the text of a bill that frees the administration from its elusive fiscal savings goal, but it lacked quorum in the early hours of yesterday to decide on a final amendment that will be put to a vote next week.

Following her narrow re-election victory in October, Rousseff vowed to streamline government spending to regain investor confidence after years of erratic and interventionist economic policies. Levy, her pick to head her economic team, has called for more fiscal discipline and credible debt-reduction goals.

Cuba

Alfonso Morre has spent nine years studying mechanics and civil engineering in order to become — a Havana taxi driver. Following President Barack Obama’s decision to ease the embargo on Cuba, he is hoping for something better.

Driving a 26-year-old Russian-made Lada through the cobbled streets of Cuba’s capital, Morre says he needs his engineering degree just to keep the car on the road. That may be about to change.

“Hopefully, once the U.S. trade opens up, companies will come here looking for engineers,” Morre, 33, said. “Once the new cars and spare parts start coming in, you won’t need to be an engineer to run a taxi here.”

Morre is one of the army of university-educated Cubans stuck in manual jobs such as hotel laundry or waiting tables. Their skills will be a big draw for companies looking for investment opportunities in the island should the U.S. agree to end the trade embargo that started in 1961, said Philip Brenner, a professor of international relations at American University in Washington.

“The Cuban development model is going to be based on high value-added production by an educated population,” Brenner said. “No one in Cuba is talking about a future scenario of making baseballs in sweatshops. They have people who would be adept in pharmaceuticals, computer engineering and advanced mechanical machinery.”

Cuba’s economic growth has slowed to 1.3% this year, almost half the official target and down from 2.7% in 2013, according to government data.

Obama and Cuban President Raul Castro announced the plans to re-establish diplomatic ties, release some prisoners and work to ease a five-decade old embargo on Dec. 17.

Laundry lady Lucila Gomez, 62, hopes the move will lead to the re-opening of the pajama factory she used to supervise in Havana. After getting a degree at Moscow State Textile University and working in Bulgaria, Gomez now irons tourist shirts in the Havana Libre hotel.

“Hopefully I won’t have to end my career doing laundry,” she said.

Decades of Soviet investment in Cuba’s education system have brought universal literacy to the island, with about 100,000 people trained at Russian and Ukrainian universities out of a population of 11.3 million.

Eighty percent of college-aged Cubans were enrolled in post-secondary education in 2011, the highest in Latin America and the Caribbean, compared with 75% in Argentina, 71% in Chile and 29% for Mexico, according to the United Nations.

There is a special focus on hard sciences like medicine and engineering, an investment in human capital that has helped the country stay afloat since the end of subsidies from the Soviet Union. About 30,000 Cuban doctors work in Venezuela to help pay for the approximately 100,000 barrels a day of oil the South American country supplied to Cuba in 2013.

In the central province of Cienfuegos, Brazilian contractor Helio Piza is supervising 60 Cuban workers running a 30-year-old sugar plant without any spare parts.

“The level of academic preparation here is very high,” Piza said in an interview in his office in the Fifth of September plant on Dec. 29. “Education allows Cubans to be ingenious with the little they have available.”

In the rusty plant, dust covered workers were welding together hand-made metal parts of sugar cane grinders on a December afternoon.

Alexandre Carpenter, co-president of cigarette and cigar-maker Brascuba SA, has a similar impression to Piza. On the factory floor, a quarter of the Cubans have a college degree, while for the company as a whole the figure is 46 percent, Carpenter said by phone from Brazil.

Brascuba, a joint venture between Rio de Janeiro-based Souza Cruz SA and Tabacuba, employs 500 people on the island, of which 492 are Cubans.

“The Cuban workforce is a key point for investment in the country,” Carpenter said. “When you’re installing a new machine, for example, you have high-level discussions with the engineers. They are much more prepared than the average Brazilian worker.”

Sugar plant manager Piza said the challenge is to attract younger workers prepared to work on state salaries of about $20 a month and to train them to work with modern technology and profit-making mentality.

“It’s difficult to motivate workers to be productive on the kind of money we can offer,” he said.

Cuban migrants into the U.S. have benefited from their higher educational levels.

Cuban-born residents earn 20% more on average than the Hispanic population overall and are more likely to own their home, according to 2011 census data cited by the Washington-based Pew Research Center. About two million Hispanics of Cuban origin live in the U.S., with 70 % in Florida.

Jodi Bond, vice president for the Americas at the U.S. Chamber of Commerce, said U.S. companies are likely to step up lobbying for Congress to end the embargo on Cuba, opening the door to investment.

“They will actively work to lift the embargo,” Bond said in a telephone interview from Washington. “There’s potential for explosive growth, opportunities for engineers and collaboration in the health, technology and telecommunications industries. Much of that may move slowly, but the companies see a lot of promise.”

ASIA

Brunei

In the third quarter of 2014, Gross Domestic Product (GDP) for Brunei Darussalam at current prices was estimated at BND$4,428.7 million compared to BND$4,944 million in the second quarter. In terms of GDP growth at constant prices, the third quarter recorded a decline of 0.2% year-on-year, Borneo Bulletin reported.

This was mainly attributed to the decrease of the Oil & Gas sector by 3.2%.

Meanwhile, the Non-Oil & Gas sector increased by 1.8%.

In the third quarter of 2014, the Agriculture, Forestry & Fishery sector increased by 4.3% year-on-year due to the increase in the production of Livestock and Poultry and Vegetables, Fruit & Other Agriculture by 8.5% and 1.7% respectively.

The Industrial sector continued to decline by 2.5% after a decrease of 0.9% in the second quarter. This was due to negative growth of Manufacturing by 11.0%.

Meanwhile, both Mining and Construction increased by 0.9% followed by Electricity & Water by 0.7%.

The Services sector continued to grow by 1.9%, after an increase of 2.3% in the second quarter.

Finance recorded the highest growth of 2.8%, followed by Transport & Communication 2.2%, Trade 1.9%, Government services 1.8%, Private Services 1.6% and Real Estate & Ownership of Dwellings 1.1%.

By the expenditure approach, GDP decline was due to the decrease in Exports of Goods and Services by 2.2%.

Meanwhile, Imports of Goods and Services has the highest increase by 17.9% followed by Personal Consumption Expenditure by 2.% year-on-year, Government Consumption Expenditure 1.9% and Capital Formation 1.1%.

China

Even as a slew of indicators reveal the weak state of China’s economy, officials are poised to revise the official size of Chinese gross domestic product, probably upward, making it as much as 10% larger than previously thought.

Beijing will reveal the findings from the country’s roughly twice-a-decade economic census, for which almost 3 million census takers canvassed more than 10 million companies and 60 million individual-owned private enterprises earlier this year.

The two previous censuses saw GDP amended upward by 4.4% in 2008 and 16.8% in 2004, as they more accurately measured China’s fast-growing services sector. A Chinese vice premier, Zhang Gaoli, referred to the census data as “precious wealth” earlier this year, reported the official Xinhua News Agency.

A Bloomberg News survey of 12 economists showed revisions due to the census will likely push 2013 GDP up 1% to 3%, or as much as $275 billion, while lifting 2014 GDP growth 0.1 to 0.3 percentage points. That could help China reach its official goal of about 7.5 percent GDP growth this year.

“The government under Premier Li [Keqiang] will use whatever means to achieve” the target, said Liu Li-Gang, chief greater China economist at Australia & New Zealand Banking Group in Hong Kong. Liu expects the census revisions to add from 0.1 to 0.3 percentage points to this year’s GDP growth and has increased his estimate from 7.2% to 7.5%, as Beijing has increased spending and property prices stabilize.

Meanwhile, Chinese officials will also announce new methods to count R&D expenditures and measure housing expenses—both more in line with internationally accepted standards—which are also expected to boost GDP. Those changes, along with better counting due to the census, will lead China’s National Bureau of Statistics to revise 2013 GDP up 5% to 10%, predicts the New York-based consultancy Rhodium Group.

“China is using an upgraded methodology and the results should be taken seriously,” wrote Rhodium economists Daniel Rosen and Beibei Bao. “Beijing is counting activity previously underestimated, and converging toward international best practice.”

Similarly, London-based Capital Economics is expecting a 5% to 10% upward revision in the size of Chinese GDP, in a research note published recently. Still, no reason to get too excited, the macroeconomic research company argues.

“Of course, nothing about the economy will have changed. It may be seen to be slightly richer in both per capita and aggregate terms and a few steps closer to overtaking the US in size,” writes Capital Economics chief Asia economist Mark William. “Even if recent years’ growth is determined to have been a little higher, this won’t make a big difference to the scale of the slowdown that has seen GDP growth halve since 2007. Policymakers’ priorities won’t change.”

Singapore

The city-state’s economy expanded less than economists estimated last quarter after its manufacturing industry weakened with slowing growth in China and an uneven global recovery.

Gross domestic product rose an annualized 1.6% in the three months to Dec 31 from the previous quarter, when it expanded 3.1%, the trade ministry said in a statement. The median of five estimates in a Bloomberg News survey was for a 3% expansion.

Singapore's productivity growth has been weak, Prime Minister Lee Hsien Loong said on Dec 31, and the trade ministry has said the economic outlook for 2015 is "modest" with a tight labor market restraining some industries. The export-dependent island is also adjusting to a China on track to record its weakest full-year growth in almost a quarter century, even as the US saw its biggest expansion in more than a decade in the third quarter.

"It caps a pretty moderate year for growth," said Michael Wan, a Singapore-based economist at Credit Suisse Group AG, who predicts the Southeast Asian nation will expand 3.5% in 2015. "China's slowing, Japan's pretty moribund, Europe's still essentially going nowhere," with only the U.S. providing some relief in the global economy.

A Chinese manufacturing gauge slipped to the lowest level in 18 months in December, adding to evidence that the economy probably grew last year at the slowest pace since 1990, according to analysts surveyed by Bloomberg News. Meanwhile, the US expanded at a 5% annualized rate in the three months ended in September, and a report this week showed consumer confidence at a near seven-year high.

Singapore's GDP grew 1.5% in the three months through December from a year earlier, compared with a median estimate of 1.8%. The economy expanded 2.8% last year, according to the advance estimates which are computed largely from figures in the first two months of the quarter and may be revised.

Singapore's manufacturing fell 5.8% last quarter from the previous three months, the trade ministry said. The services industry grew 3.8% in the same period, while construction expanded 8%.

Manufacturing also contracted from a year earlier, mainly due to a decline in the output of the transport engineering, electronics and general manufacturing clusters, the report said. Growth in construction was mainly supported by public sector activities, it said.

"If you look forward into 2015, I think there's probably a bit more reason to think that it should improve," said Mr. Wan. "You do have oil prices coming down, and that should be a boon for consumers, especially in the developed world, and I think that should be a positive for an open economy like Singapore."

Thailand

The Thai economy continued to slow in November.

The domestic front remained anemic. Private consumption grew 0.7% from a year ago versus the 0.3% in October, but one would not call 0.7% growth a major improvement.

Economists had pinned hope on external demand, particularly in the form of tourism, since Thailand is now back to normal after the military coup in May. Well, they are disappointed. Tourist arrivals decelerated to 2.5% from a year ago from 6.1% in October. The Bank of Thailand blamed “the depreciation of the Russian ruble and Japanese yen,” which resulted in fewer tourists from the two countries.

As such, Nomura Securities cut its 2014 GDP growth forecast from 1.1% to 0.6% only, now expecting the Thai economy to grow by 2% in the fourth-quarter.

Vietnam

According to the General Statistics Office (GSO), Vietnam’s total domestic product (GDP) in 2014 was estimated to increase 5.98% - the highest since 2011.

This is also the first time after three years that the country’s GDP exceeded the yearly target set by the National Assembly (5.8% for 2014). In particular, GDP growth improved each quarter, with an increase of 5.06% in the first quarter; 5.34% in the second quarter; 6.07% in the third quarter and 6.96% in the fourth quarter.

Vietnam’s GDP in 2014 is estimated at nearly VND2,700 trillion compare to over VND2,500 trillion, based on the price in 2010. If it is calculated at the current price, GDP this year reached more than VND3,900 trillion and nearly VND3,600 trillion last year.

The structure of the economy moved in a positive direction, the share of agriculture, forestry and fisheries continued to decline, while industry and construction increased and the service sector maintained the rate of last year.

In 2014, industrial production increased by 7.6%, much higher than the growth of 5.6% in 2013 with a rapidly increasing trend in the last months of the year (10.1% growth in the fourth quarter compared to 5.3% of the first quarter). Some industries had a high production index, including electronic products, computers, mobile phones, motored vehicles, and leather and footwear.

The growth rate of the inventory index fell. The inventory index of the processing and manufacturing industry by Dec. 1 2014 increased by 10% compared to the same period of 2013, lower than that in 2012 (20.1%) and 2013 (10.2%).

The total social development investment in 2014 increased by 11% compared to 2013 and was equivalent to 31% of GDP, higher than 30.4% in the previous year.

Budget revenue by mid-December reached VND814.1 trillion, 4% higher than the annual estimates. Meanwhile, budget spending was estimated at VND968.5 trillion, or 96% of the annual estimates. Estimated budget deficit this year is VND154.4 trillion, or 5.7% of GDP.

The total retail sales of goods and services in 2014 were estimated to increase by 10.6% compared to 2013.

For 2015, with the positive signs of the economy, the National Assembly set a target of 6.2% of GDP growth, and inflation at 5%.

EUROPE / AFRICA / MIDDLE EAST

Europe

A new Macroeconomic Outlook report from Intesa Sanpaolo argues that oil prices below $60 a barrel will add up to 0.4% economic growth to oil importing Euro area nations. Intesa Sanpaolo analyst Luca Mazzomo also points out that there are likely to be positive secondary effects that ripple through oil importing economies for some time even if prices begin to move back up in a few months.

Oil prices began trending down over the summer, but the sell-off intensified into a frenzy in the fourth quarter. Compared to the firm’s September scenario when prices were forecast to remain roughly stable at prices close to those in mid-2014, the drop in crude prices to date amounts to a 28.3% drop in average 2015 terms. The alternative scenario of a deeper fall to $60 seems more and more likely, at least for the first half of next year. Relative to net oil imports in 2013, lower oil prices at the 28.3% level implies savings on imports at current prices of 0.4-0.6% of GDP for most first world nations, increasing to 0.6-0.8% in the $60 scenario.

Of note, the actual impact on GDP will be somewhat less because of the contraction of exports to producer countries, guesstimated at 0.1-0.2% of GDP. This means the net effect from the drop in oil prices alone will total to 0.3-0.4% of GDP for the three major economies of the euro area, and for the U.S. and China.

Israel

Israel’s economy expanded faster than previously estimated in 2014 on accelerated consumer spending, the Central Bureau of Statistics said, revising an earlier forecast.

Gross domestic product increased 2.6% from 2013, the bureau said at a Jerusalem press conference, based on partial data for the year. The figure compares with the bureau’s previous 2.2% estimate.

Growth was crimped in part by 50 days of fighting with the Hamas-controlled Gaza Strip in July and August. The economy contracted 0.1% in the third quarter, the bureau said, revising an earlier estimated contraction of 0.4%.

“This year was special because of the significant effect of Operation Protective Edge,” said Oz Shimony, head of macroeconomics at the bureau, referring to the Gaza conflict. “We already see indicators that point to a return to the growth trend.”

Expectations that the government would cancel the 18-percent value-added tax on homes for eligible first-time buyers also affected growth, as homebuyers delayed purchases.

“There is no doubt that expectations for the VAT law affected the housing market fairly strongly, and as a result, the building sector,” Shimony said. “It can clearly be seen in fixed capital investment figures.”

The zero-VAT plan, championed by former Finance Minister Yair Lapid, withered after Prime Minister Benjamin Netanyahu fired him earlier this month and called early elections that will be held in March.

Earlier this week, the Bank of Israel estimated growth at 2.5% this year, up from a September prediction of 2.3%. Last year, the economy expanded 3.2%.

The central bank’s monetary policy committee, led by Governor Karnit Flug, held the benchmark interest rate at a record low on Dec. 29, citing new data this month indicating a recovery. The bank predicted “a relatively high growth rate” in the coming quarters.

Consumer spending rose 3.8% this year, compared with 3.3% last year, the statistics bureau said. Government outlays also increased by 3.8%, up from 3.5% in 2013.

Exports of goods and services inched up 0.6% in 2014, compared with an increase of 1.5% last year, the bureau said. Exports (ISTBTSE) excluding diamonds and startups rose 3.6%, after declining 0.3% in 2013.

Investment in fixed capital declined 2.7%, after rising 1.1%in 2013.

GDP per capita went up 0.7% in 2014 to 132,500 shekels ($37,000), the bureau said. Last year, GDP per capita increased 1.3%.

Israel posted a current-account surplus of $10.6 billion in 2014, or 3.5% of GDP, compared with a surplus of $6.9 billion, or 2.4% of GDP, the previous year.

Russia

Russia’s economy contracted last month for the first time in five years amid the sharp fall in oil prices and the collapse of the ruble.

Gross domestic product shrank by 0.5% in November compared to the same month last year, the economy ministry said, as Russia’s currency resumed its slide, which had been halted with a series of robust government support measures over the previous 10 days.

The ruble weakened by 5.4%, closing at 57.1 against the dollar in Moscow.

Analysts said the contraction in November showed that the recent steep slide in oil prices and the currency crisis were bringing on a recession, which had long been expected but fought off earlier this year.

In the first 11 months of the year, the economy grew by 0.6% compared with the same period last year.

Russia’s economic growth had already been slowing sharply since 2013 due to a drop off in investment. After Moscow’s annexation of Crimea and its support for the separatist war in eastern Ukraine triggered western sanctions which virtually exclude Russian banks and corporates from international capital markets, economists repeatedly predicted that the country would slide into recession this year. But until October, a temporary revival in industrial production and strong agricultural production helped keep growth just above zero.

However, when oil prices began to plunge dramatically in October, the ruble depreciated so fast that it triggered panic in Russian households. A first wave of selling prompted the central bank to float the ruble in November. On December 16 the ruble suffered its biggest intraday drop since 1998, plummeting to Rbs80 against the dollar in a fully-fledged currency crisis.

Even the Russian authorities now predict a recession. The central bank forecasts the economy will contract by 4.5% next year if oil prices average US$60 a barrel.

Dmitry Polevoy, chief economist for Russia at ING Bank in Moscow, said the worsening economic situation was a result of sanctions, oil prices and the market panic earlier this month. “There is no cause for optimism,” he said.

United Arab Emirates

The UAE has turned into a major economic power in the region over the past 10 years, with its Gross Domestic Product (GDP) growing from Dh314.8 billion in 2004 to Dh1.54 trillion in 2014, according to a report on the online portal, HotelandRest.

The report showed that the UAE has witnessed a transition from an oil-based economy to a more diverse one with multiple sources of income. In the past 10 years, non-oil sectors contributed 69% of the total GDP, dropping the contribution of the oil sector to almost one third.

The economic growth taking place in the 10 years since the beginning of President His Highness Shaikh Khalifa Bin Zayed Al Nahyan’s presidency is expected to continue. According to a forecast by the International Monetary Fund, the country’s GDP will rise in 2018 to Dh1.74 trillion.

Over the past 43 years, though, the UAE’s GDP has increased more than 236 times, going up from nearly Dh6.5 billion in 1971, as per the report.

The UAE is also expected to continue diversifying its income sources — a policy initiated by Shaikh Zayed Bin Sultan Al Nahyan.

The report added that as a result the successful policies led by Shaikh Khalifa, the UAE has positioned itself in 10th place internationally on the per capita income index, with the national savings rate of GDP rising to 32.9%.

The rate is the largest in the world, and exceeds most major economies such as Germany, France, Italy, Brazil and Canada among others.

In terms of national per capita gross income, the report predicted that the UAE will become one of the top 10 countries in the world by 2020, noting that the country currently holds the 16th place.

The president’s policies were also behind the UAE’s current position as one of the most economically-powerful countries in the world in terms of liquidity and cash surplus.

Highlighting the travel and tourism sector, the report stressed that the UAE will be one of the best countries in the world in terms of attracting tourists due to its tourism infrastructure.

The report is based on a recent research by the World Travel and Tourism Council, which expected the travel and tourism sector to contribute about Dh122 billion to the country’s GDP.

The contribution, which was 8.5% of GDP in 2014, represents an annual increase of 4.5% when compared to 2013.

United Kingdom

The United Kingdom has overtaken France to become the fifth largest economy in the world after the money made from prostitution and drugs was counted in the GDP figure for the first time.

Britain's economy is expected to be worth a total £1.86trillion in 2014 - up from £1.63trillion the previous year - compared to £1.82trillion in France, new calculations reveal.

Government figures show that prostitution added about £4.3billion to the economy while illegal drugs provided a roughly £6.7billion boost.

The darker corners of the economy are now being counted - alongside traditional sectors such as farming and financial services - as part of an overhaul in the way economic activity is measured

This year is the first time that the GDP - an economic estimate produced every three months by the Office for National Statistics (ONS) - has included the money made from illegal drugs and sex work.

The change, which was introduced as part of EU rules implemented earlier this year, means that a booming sex trade or an expansion in the market for illegal drugs can boost the Chancellor's outlook.

These more inclusive figures edged the nation ahead of France in world rankings when they were used in calculations of the size of the UK's economy.

But experts at the Centre for Economics and Business Research, who produced the World Economic League Table, noted that France did not include the sex work and illegal drugs in its estimations.

It added that, if it did, there was a possibility that it might retake its fifth place position - and that the UK might drop down to sixth.

France does not include prostitution and illegal drugs in calculations as it does not believe they constitute 'voluntary commercial activity', adding that they are often tied to criminal networks.

The GDP covers every sector - from manufacturing and construction to agriculture, public services and tourism. It now also covers the import, production and sale of illegal drugs and the ‘provision of prostitution services’.

The data classes growing drugs or importing them as ‘production’, buying them for home use as ‘expenditure’ and selling them as ‘income’.

It covers crack cocaine, powder cocaine, heroin, cannabis, ecstasy and amphetamines.

While some EU countries give a detailed breakdown of prostitution types such as ‘street’ and ‘escorts’, the UK is not able to do this with the data available.

Illegal drugs and sex work were worth £12.3bn, or 0.7% of our GDP, making them as economically significant as agriculture, according to ONS figures released this year.

The CEBR expects Britain to pull further ahead of France in the coming years. The data also showed that China is expected to overtake the US as the world's largest economy in 2025.

Meanwhile, the figures also showed the impact of the economic crisis in Russia, which slipped two places in the 2014 league table to tenth, back below India and Italy.

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