Data has been released by the International Comparison Program (ICP), covering 176 economies.
Key Findings
- China ($28.8 trillion) was the largest economy in 2021, followed by US on the basis of PPP.
- India’s economy ($11.0 trillion) was the third largest, accounting for 7.2 % of Global GDP.
- On the basis of GDP ranking, India is 5th largest economy at present.
- High-income economies with just 16.4 % of world’s population accounted for 46 % of the global GDP. On the other hand, low-income economies (8.4 % of world’s population) accounted for just 1 % of global GDP.
About PPP
- PPP is the exchange rate at which one nation's currency would be converted into another to purchase the same amounts of a large group of products.
- Used to determine the relative value of different currencies.
- Significance: Provides more accurate measure of living standards across countries than Market exchange rate (MER)-based estimates.
- MER often inflates the buying power of high-income countries (where prices are high) and underestimates that of low-income ones (where prices are lower).
- PPP exchange rates are relatively stable over time than MER.
About ICP
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