Middle income countries contribute half world's output
Washington : The International Comparison Program (ICP) released new
data which showed that the world economy produced goods and services
worth over $90 trillion in 2011 and that almost half of the world's
total output came from low and middle income countries.
Under the authority of the United Nations Statistical Commission, the
2011 round of ICP covered 199 economies - the most extensive effort to
measure Purchasing Power Parities (PPPs) across countries ever. ICP 2011
estimates benefited from a number of methodological improvements over
past efforts to calculate PPPs.
The ICP's principal outputs are PPPs for 2011 and estimates of
PPP-based gross domestic product (GDP) and its major components in
aggregate and per capita terms. When converting national economic
measures (e.g. GDP), into a common currency, PPPs are a more direct
measure of what money can buy than exchange rates.
ICP implementation was led and coordinated by the ICP Global Office,
hosted by the World Bank, in partnership with regional agencies
overseeing activities in eight geographic regions: Africa, Asia and the
Pacific, Commonwealth of Independent States (CIS), Latin America, the
Caribbean, Western Asia, Pacific Islands, and the countries of the
regular PPP program managed by the Statistical Office of the European
Communities (Eurostat) and the Organisation for Economic Cooperation and
Development (OECD).
In addition, two 'singleton' economies, Georgia and Iran,
participated in bilateral exercises with partner economies, without
being part of any regional comparisons.
Major findings are six of the world's 12 largest economies were in
the middle income category (based on the World Bank's definition). When
combined, the twelve largest economies account for two-thirds of the
world economy, and 59 percent of the world population.
The PPP-based world GDP amounted to $90,647 billion, compared to
$70,294 billion measured by exchange rates, middle income economies'
share of global GDP is 48 percent when using PPPs and 32 percent when
using exchange rates, low income economies, as a share of world GDP were
more than two times larger based on PPPs than respective exchange rate
shares in 2011.
Yet, these economies accounted for only 1.5 percent of the global
economy, but nearly 11 percent of the world population, roughly
twenty-eight percent of the world's population lives in economies with
GDP per capita expenditures above the $13,460 world average and 72
percent are below that average, the approximate median yearly per capita
expenditures for the world - at $10,057 - means that half of the global
population has per capita expenditures above that amount and half below.
The six largest middle income economies - China, India, Russia,
Brazil, Indonesia and Mexico - account for 32.3 percent of world GDP,
whereas the six largest high income economies - United States, Japan,
Germany, France, United Kingdom, and Italy - account for 32.9 percent.
Asia and the Pacific, including China and India, accounts for 30
percent of world GDP, Eurostat-OECD 54 percent, Latin America 5.5
percent (excluding Mexico, which participates in the OECD and Argentina,
which did not participate in the ICP 2011), Africa and Western Asia
about 4.5 percent each.
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 percent of the CIS, and
Brazil for 56 percent of Latin America. South Africa, Egypt, and Nigeria
account for about half of the African economy.
The Price Level Index (PLI) is the ratio of a PPP to a corresponding
exchange rate. An index over 100 means prices are higher on average than
in the world, and one less than 100 means prices are relatively lower.
The most expensive economies in GDP terms are Switzerland, Norway,
Bermuda, Australia and Denmark, with indices ranging from 210 to 185.
The United States ranked 25th in the world, lower than most other
high-income economies, including France, Germany, Japan, and the United
Kingdom.
Twenty-three economies show a PLI of 50 or below. The cheapest
economies are Egypt, Pakistan, Myanmar, Ethiopia and Lao People's
Democratic Republic, with indices ranging from 35 to 40. The five
economies with the highest GDP per capita are Qatar, Macao SAR, China,,
Luxembourg, Kuwait, and Brunei. The first two economies have more than
$100,000 per capita.
Eleven economies have more than $50,000 per capita, while they
collectively account for less than 0.6 percent of the world's
population. The United States 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.
A general measure of material well-being of each economy's population
is measured better by actual individual consumption per capita - a
measure of all expenditures in the economy that directly benefit
individuals - rather than by GDP per capita.
By this measure, the five economies with highest actual individual
consumption per capita are Bermuda, United States, Cayman Islands, Hong
Kong SAR, China and Luxembourg.
The world average actual individual consumption per capita is
approximately $8,647. At 27 percent, China now has the largest share of
the world's expenditure for investment (gross fixed capital formation);
followed by the United States at 13 percent.
India, Japan and Indonesia follow with 7 percent, 4 percent, and 3
percent.
China and India account for about 80 percent of investment
expenditure in the Asia and the Pacific region. Russia accounts for 77
percent of CIS, Brazil for 61 percent of Latin America and Saudi Arabia
for 40 percent of Western Asia.
Limitations in the use of the data PPPs are statistical estimates.
Like all statistics they are subject to sampling errors, measurement
errors, and errors of classification.
They should be treated as approximations to true values. Because of
the complexity of the process used to collect the data and calculate the
PPPs, it is not possible to directly estimate their margins of error.
World Bank
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