World Bank says China, India buying power much less in new measure
18/12/2007 16:02
The economies of China and India were much less than estimated when
measured by purchasing power, the World Bank said yesterday.
The preliminary
global report on "purchasing power parity" (PPP) provides estimates of
internationally comparable price levels and the relative purchasing power of
currencies for 146 economies, said a statement released by the World
Bank.
China participated in the survey program for the first time ever and
India for the first time since 1985. The new results are more statistically
reliable estimates of the size and price levels of both economies, according to
the Bank.
Under the old calculation, China had a GDP of 8.8 trillion dollars
in 2005, about 15 percent of global GDP of 59 trillion dollars, while according
to the new measure, China's economy shrank by 40 percent to 5.3 trillion
dollars, which is about 10 percent of global GDP of 55 trillion
dollars.
India's share of the world economy based on PPP dropped to 4.3
percent from a pervious estimate of 6 percent.
Overall, the 2005 benchmark
results show that the size of the world economy measured in PPP terms is smaller
than previous estimates. The Asian and African economies are one-third and
one-fourth smaller, respectively.
However, Asia still accounts for over 20
percent of the world's output.
In the study, the United States still has the
world's biggest economy with 23 percent of global output. That compares with 29
percent using market rates.
The most expensive economies are Iceland,
Denmark, Switzerland, Norway, and Ireland with the Price Level Index (PLI)
ranging from 154 to 127. The United States ranked 20th in the world, lower than
most other high-income economies, including France, Germany, Japan and Britain,
according to the report.
The PLI shows which economies are the most and least
expensive. It corresponds to travelers' experience of making purchases after
converting their currency at market exchange rates
An index over 100 means
prices are higher on average than in the US, and one less than 100 means prices
are relatively lower.
The cheapest economy in the world are Tajikistan,
followed by Ethiopia, Gambia, Kyrgyzstan and Bolivia, the report
added.
Xinhua
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