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UID: EC-20240819-WORLD-03
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Gross Domestic Product (GDP) is one of the most important indicators used to measure the economic performance of a country. It represents the total monetary value of all goods and services produced over a specific period. However, GDP can be calculated in different ways, with one of the most insightful methods being GDP based on Purchasing Power Parity (PPP). This approach adjusts for differences in the cost of living across countries, allowing for more accurate international comparisons. GDP based on PPP adjusts the nominal GDP of a country by taking into account the relative cost of goods and services in that country compared to others. This means that the same basket of goods and services should have the same price when compared internationally, regardless of local currency values. The global share of GDP based on PPP refers to the percentage of the world’s total economic output, adjusted for PPP, that is contributed by a specific country or region. This metric is used to assess a country’s economic size relative to the global economy. The global GDP share is calculated by dividing a country’s GDP based on PPP by the total global GDP based on PPP and then multiplying by 100 to get a percentage.
Based on the 2024 GDP shares calculated using Purchasing Power Parity (PPP), the global economic landscape reveals significant insights about the distribution of economic power. China leads the world with a 19.01% share of global GDP (PPP), demonstrating its substantial economic influence and continued position as the world’s largest economy when measured by purchasing power. The United States follows with 15.5%, showing that while it remains a dominant economic force, there’s a notable gap between it and China in terms of PPP-adjusted economic output.
India’s position as the third-largest economy with 7.86% of global GDP (PPP) is particularly noteworthy, highlighting its growing economic significance in the global landscape. The considerable gap between India and the next-ranked country, Japan (3.62%), underscores the emergence of a potential “big three” in the global economy, with China, the US, and India significantly ahead of other nations.
European economic powers maintain substantial but relatively smaller shares, with Germany leading at 3.06%, followed by the United Kingdom (2.17%) and France (2.15%). This clustering of major European economies around similar levels suggests comparable economic influence when adjusted for purchasing power. Russia’s position (2.95%) indicates it maintains significant economic weight despite international sanctions and geopolitical challenges in 2024.
The presence of Indonesia (2.54%) and Brazil (2.30%) in this top tier demonstrates the growing importance of emerging markets in the global economy. Indonesia’s higher position compared to traditional economic powers like France and the UK particularly highlights the shifting balance of economic influence toward Asian economies.
Collectively, these top ten economies account for approximately 61.16% of global GDP based on PPP, indicating a significant concentration of global economic power, while also suggesting that nearly 40% of global economic activity is distributed among all other nations combined. This distribution pattern reflects both the sustained dominance of traditional economic powers and the rising influence of emerging economies, particularly in Asia.
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