trillions in GDP ..

by Saurabh Gupta

14.119 trillions US dollars is how much Americans earned or spent in 2010.
34.050 trillion Yuan is how much Chinese earned or spent in 2010.

And so for Japanese it is 4.74 trillion Yen(100), Indians it is 59.520 trillion Rupees, Brazilians it is 3.143 trillion Reals, Australians it is 1.255 trillion Australian dollars, Germans it is 2.397 trillion Euros, English it 1.392 trillion Pounds..

Of course, if factor in US dollar.. the only trillionaire  remains is US and that too at such a scale that next closest country is at $4.984 trillions and that is China.

These numbers triggered a thought in me, are these really correct? Are they independent of international currency trade and current market forces?

So I googled, and it’s no great discovery to find out a term called PPP..

Purchasing power parity

So before that I had to understand what is consumer basket of goods? Its a basket of essential commodity to a person in his country. The list at – http://www.bls.gov/cpi/cpifaq.htm#Question_7– tells us what Americans been spending their earnings on. Typically the daily meals, education, housing, medical are few of the several broad categories purchasable goods fall in. So how to factor these in? Here’s broad definition from wiki –

“sell an entire CPI basket in one country, convert the cash at the currency market rate & then rebuy that same basket of goods in the other country (with the converted cash)”

So they have done the calculation and we have the numbers. More on where I got the number little later.

Country Nominal GDP in trillion US dollars
USA 14.119
China 9.046
Japan 4.152
India 3.615
Germany 2.811
UK 2.125
Russia 2.116
Brazil 2.010
Australia .848

compare it to how it looks with no PPP factoring –

Country Nominal GDP in trillion US dollars
USA 14.119
China 4.984
Japan 5.068
India 1.236
Germany 3.338
UK 2.178
Russia 1.231
Brazil 1.574
Australia .994

Noticeably, the BRIC nations’ GDP reduces if one takes out the purchasing power parity.

This is probably no conclusion, however an important observation. A single statistical figure can never be an absolute indicator unless it’s put in a micro economic perspective. I am sure a class in economics would have saved me this trouble.

Now for where did I get the data. Nope, its not Wiki. But, wiki definitely is best place to get the sources where they get the data from. Here’s my query against international monetary fund’s website – click here

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