Yes, it's the largest city on the small section of the Sword Coast that falls within the region known as the Western Heartlands. That doesn't mean it's the biggest city on the whole of the Sword Coast, nor does it mean it's the biggest city in Faerûn. It just means it's bigger than Elturel, Scornubel, Iriaebor, Berdusk, and the like.
While 5e doesn't delve into population numbers like previous editions did, here's a Twitter thread in which Ed Greenwood muses on Baldur's Gate being the second largest city in Faerûn after Calimport in terms of population. (I think Waterdeep, even with its 'transient' population, is still larger in terms of surface area.)