The global cost of dementia this year will be £388 billion - more than 1% of GDP, according to a report out today.
This includes the cost of social care, unpaid care by relatives and the medical bills for treating dementia.
The figure is expected to rise rapidly in the coming years but governments are woefully unprepared to meet the challenge, said the World Alzheimer Report 2010.
Experts at the Karolinska Institute in Sweden and King's College London examined the cost of dementia care and found that, if it was a country, it would be the world's 18th biggest economy.
And if it was a company, it would be the world's biggest by annual revenue, way above Wal-Mart (US 414 billion or £265.6 billion) and Exxon Mobil (US 311 billion or £200 billion).
Campaigners already warned that the costs of caring for people with dementia are on the rise, mostly due to people living longer.
The number of people with dementia will double by 2030, and more than triple by 2050.
An estimated 35.6 million people currently have dementia worldwide, increasing to 65.7 million by 2030 and 115.4 million by 2050.
Today's study said the costs will rise even faster than prevalence of the disease and, worldwide, there could be an 85% increase in costs by 2030.
In the UK, the Alzheimer's Society estimated dementia currently costs the country £20 billion a year.
The report was issued to coincide with World Alzheimer's Day and was commissioned by Alzheimer's Disease International (ADI).
Dr Daisy Acosta, chair of ADI, said: "This is a wake-up call that Alzheimer's disease and other dementias are the single most significant health and social crisis of the 21st century.
"World governments are woefully unprepared for the social and economic disruptions this disease will cause."
Professor Martin Prince, from the institute of psychiatry at King's College London, co-authored the report.
He said: "The care of people with dementia is not just a health issue - it is a massive social issue.
"This is particularly true in low- and middle-income countries which lack adequate systems of formal care.
"Governments must show greater leadership, working with all stakeholders, to drive solutions to the long-term care issue."
The study recommends all governments formulate long-term plans for dealing with dementia, and praises work already ongoing in France, Australia and England.
Research into the disease must also be properly funded - currently it lags way behind other conditions like heart disease and cancer.
Ruth Sutherland, interim chief executive of the Alzheimer's Society, said the "shocking statistics" in the report show the global dementia crisis cannot be ignored.
She added: "These sky-high figures represent not only a huge economic burden but also reflect the immeasurable impact dementia has on the lives of millions of people across the world.
"There are 750,000 people living with dementia in the UK and this number is set to reach a million within a generation.
"If we are to transform lives and reduce costs, we need to act now. The government must lead the way in ensuring national dementia strategies are fully implemented and dementia research is given the funding it so desperately needs."
Rebecca Wood, chief executive of the Alzheimer's Research Trust, said: "This report makes for unsettling reading, with dementia having a startling impact on society and economies the world over."
She said the UK was home to some of the world's leading dementia scientists but far more money was needed for research.
"We must invest proportionately in dementia research or we risk abandoning the millions worldwide who live with the trauma of dementia today and the many more tomorrow.
"It is not hyperbole to state that dementia is the greatest medical challenge of our times. The sooner we realise this and act, the better."