Global Purchasing Power Parities (PPP) Data

Global Purchasing Power Parities (PPP) Data

Global Purchasing Power Parities (PPP) Data Released for 2021

  • Largest economy in 2021 – China followed by US on the basis of PPP. 
  • India’s position – 3rd largest economy ($11.0 trillion), accounting for 7.2% of Global GDP.
    • On the basis of GDP ranking, India is 5th largest economy at present.
  • High-income economies with just 16.4 % of world’s population accounted for 46 % of the global GDP.
  • Low-income economies (8.4 % of world’s population) accounted for just 1 % of global GDP.
  • Rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country.
  • Used to convert the national poverty lines from some of the poorest countries in the world to determine the Global Poverty Line.
  • For poverty estimation in India, the Tendulkar committee computed poverty lines for 2004-05 at a level that was equivalent, in PPP terms, to Rs 33 per day.
  • Significance – PPP provides more accurate measure of living standards across countries than Market exchange rate (MER)- based estimates.
    • MER often inflates the buying power of high-income countries (where prices are high) and underestimates that of low-income ones (where prices are lower). 

Source: World Bank


Previous Year Question

Which of the following is/are the indicator/indicators used by IFPRI to compute the Global Hunger Index Report?
1. Undernourishment
2. Child stunting
3. Child mortality
Select the correct answer using the code given below.

[UPSC Civil Services Exam – 2016 Prelims]

(a) 1 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 and 3 only

Answer: (c)


Practice Question

Consider the following statements:

  1. India is the third largest economy on terms of PPP
  2. PPP provides more accurate measure of living standards across countries than Market exchange rate (MER) based estimates as MER often inflates the buying power of high-income countries

Which of the statements is/are correct?

 
 
 
 

Question 1 of 1

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