NEW DELHI (TIP):
The global economic balance seems to be tilting towards the developing countries. India has overtaken Japan to emerge as the third largest economy in purchasing power parity (PPP) terms, after the US and China, latest data released by the World Bank showed. Separately, an analysis showed members of the OECD, a rich-country club, accounted for 50% of the global economy estimated at $90 trillion in 2011, compared to 60% of the $70 trillion economy in 2005. While developing countries made up the remaining half, large emerging market economies such as India, China, Brazil, Indonesia, Russia and South Africa now make up around 30% of the world GDP.
The previous version of the World Bank’s International Comparison Program (ICP) report had said that India was ranked 10th in 2005 in terms of PPP. PPP is used to compare economies and incomes of people by adjusting for differences in prices in various countries. “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 World Bank report said. It said that six of the world’s 12 largest economies were in the middle-income category.
The dozen largest economies accounted for twothird of the world economy and 59% of the population, the report added. The six largest middle-income economies – China, India, Russia, Brazil, Indonesia and Mexico – accounted for 32.3% of world GDP, while the six largest high-income economies – US, Japan, Germany, France, UK and Italy – accounted for 32.9%, showing the distance that the emerging economies had travelled through rapid growth in recent years. At 27%, China has the largest share of the world’s expenditure for investment, with the US at half the level with 13% share. India, Japan and Indonesia followed with 7%, 4%, and 3%, respectively.