India becomes world’s third largest economy, China to overtake US

Iindia-economyndia has dislodged Japan to become the world’s third largest economy even as China looks set to overtake the US as the globe’s number one economy, says a World Bank report.

A report by the International Comparison Program (ICP), hosted by the Development Data Group at the World Bank Group, has revealed that India’s economy jumped from the 10th place in 2005 to third place in a matter of just six years in 2011. The report is based on purchasing power parity (PPP), an estimate of real living costs.

“The United States remained the world’s largest economy, but it was closely followed by China when measured using PPPs. India was now the world’s third largest economy, moving ahead of Japan,” the report said. “The results indicate that only a small number of economies have the greatest shares of world GDP. However, the shares of large economies such as China and India have more than doubled relative to that of the United States.”

india-stockThe report, which was unveiled April 30, conjures up a vivid picture of the changing fortunes of the world’s leading economies and provide an insight into larger patterns in the global economy. The research portrays China’s GDP (gross domestic product) at 87 percent of the US in 2011 and says the Chinese and Indian economies have more than doubled relative to the size of the US economy. In the 2005 study, the ICP showed China’s economy was less than half the size of the US, at 43 percent.

The ICP programme is billed as the world’s largest global statistical operation, spanning 199 economies from eight regions.

The report is full of statistical nuggets that shows the world economy in a flux and the long-held pecking order undergoing rapid changes. It puts the global GDO at over $90 trillion in 2011 and showed that almost half of the total output came from low and middle-income countries.

Highlights: Number-crunching…. 

Here are some of the report’s eye-catching findings:

The economies of Japan and the UK became smaller relative to the US, while Germany increased slightly and France and Italy remained the same.”

The relative rankings of the three Asian economies — China, India, and Indonesia — to the US doubled, while Brazil, Mexico and Russia increased by one-third or more,” the report said.

The six largest middle-income economies – China, India, Russia, Brazil, Indonesia and Mexico – account for 32.3 per cent of world GDP, whereas the six largest high-income economies – US, Japan, Germany, France, UK and Italy – account for 32.9 per cent.

China and India make up two-thirds of the Asia and the Pacific economy, excluding Japan and South Korea, which are part of the OECD comparison. Russia accounts for more than 70 per cent of the CIS, and Brazil for 56 per cent of Latin America. South Africa, Egypt, and Nigeria account for about half of the African economy.”

At 27 per cent, China now has the largest share of the world’s expenditure for investment (gross fixed capital formation) followed by the US at 13 per cent.

India, Japan and Indonesia follow with 7 per cent, 4 per cent, and 3 per cent, respectively.

China and India account for about 80 per cent of investment expenditure in the Asia and the Pacific region.

Russia accounts for 77 per cent of CIS, Brazil for 61 per cent of Latin America and Saudi Arabia 40 per cent of Western Asia,

The five economies with the highest GDP per capita are Qatar, Macao, Luxembourg, Kuwait and Brunei.

The first two economies have more than $100,000 per capita, the ICP report said.

Eleven economies have more than $50,000 per capita, while they collectively account for less than 0.6 per cent of the world’s population. The US has the 12th-highest GDP per capita.

Eight economies — Malawi, Mozambique, Central African Republic, Niger, Burundi, Congo, Dem. Rep., Comoros and Liberia — have a GDP per capita of less than $1,000.

 

 

 

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