Visualizing the Composition of the World Economy by GDP (PPP)
The Composition of the World Economy by GDP (PPP)
Earlier this month, we showed you the world’s $86 trillion economy broken down by country, using nominal GDP calculations.
While this is one useful way to view the global economic picture, it’s not the only way.
Today’s visualization, which comes to us from HowMuch.net, is similar in that it also uses a Voronoi diagram to display the composition of the world economy by GDP. However, by adjusting data for purchasing power parity (PPP), it produces a very different view of how global productivity breaks down.
What is PPP?
Purchasing power parity, or PPP, is an economic theory that can be applied to adjust the prices of goods in a given market.
In essence, instead of using current market rates for prices (such as in nominal data), PPP tries to more accurately account for differences in the cost of living between countries – especially in places where labor and goods are far cheaper.
When applied to GDP measurements, PPP can help provide a more accurate picture of actual productivity. For example, a taxi ride in Bolivia may be far cheaper than one in New York City, even though it is the same service provided over the same distance.
Applying PPP to GDP figures can help correct for these types of differences.
Ranked: Economies by GDP (PPP)
After adjusting for PPP, how does the composition of the global economy change from the nominal numbers?
Below are the 15 largest economies by GDP (PPP), as well as how their ranking changed from the previous chart, which used nominal data.
|Rank||Country||GDP (2018, PPP)||Share of World Total||Change (vs. nominal rank)|
|#2||United States||$20.5 trillion||15.0%||-1|
|#9||United Kingdom||$3.1 trillion||2.3%||-4|
|#14||Korea, Rep.||$2.1 trillion||1.5%||-2|
Using GDP (PPP), the world economy is worth $136.5 trillion in current international U.S. dollars.
What changed the most from the nominal ranking?
With PPP, you can see Indonesia ($3.5 trillion) jumps up the ranking by nine spots to become the #7 ranked economy. Likewise, Turkey ($2.4 trillion) and India ($10.5 trillion) both climb the ranking by six and four spots respectively. China also switches with the U.S., to become the world’s largest economy.
On the flipside, it is often the more developed economies with strong currencies that see a drop in their rankings. After adjusting for PPP, the United States, Japan, Germany, France, Italy, South Korea, Spain, and the U.K. all slip from their previous positions.
For more on GDP (PPP), see the projections for the world’s largest 10 economies in 2030 that we published earlier this year.
Alcohol Leads to Fatal Fall aboard Cargo Ship, Transport Malta Says
A high level of alcohol may have led to the fatal fall of the second engineer onboard the general cargo ship MV Khosrov Bey while underway in November 2018, according to a report by Transport Malta’s Marine Safety Investigation Unit... The post Alcohol Leads to Fatal Fall aboard Cargo Ship, Transport Malta Says appeared first on Logistics Solutions - Supply Chain.
China’s COSCO Sets Up New Company for Intra-Europe Services
China’s COSCO Shipping Lines has established a new subsidiary that would focus on intra-Europe feeder operations... The post China’s COSCO Sets Up New Company for Intra-Europe Services appeared first on Logistics Solutions - Supply Chain.
MOL: First LNG Bunkering Completed at Japanese Port of Nagoya
Japanese shipping company Mitsui O.S.K. Lines (MOL) and compatriot gas company Toho Gas have completed the first-ever LNG bunkering in the Port of Nagoya... The post MOL: First LNG Bunkering Completed at Japanese Port of Nagoya appeared first on Logistics Solutions - Supply Chain.
COSCO Shipping Ports’ Volumes Rise, Profit Down
Hong Kong-based ports operator COSCO Shipping Ports reported a growth in its total throughput for the quarter ended September 30, 2019, supported by shipping alliances. The post COSCO Shipping Ports’ Volumes Rise, Profit Down appeared first on Logistics Solutions - Supply Chain.
Wärtsilä’s Earnings Dented by Low Scrubber Demand
Finland-based technology major Wärtsilä Corporation said that project related challenges and low equipment demand burdened its third quarter of 2019 financials... The post Wärtsilä’s Earnings Dented by Low Scrubber Demand appeared first on Logistics Solutions - Supply Chain.