India retains position as third largest economy in PPP

News: The World Bank has released the new Purchasing Power Parities (PPPs) for reference year 2017 under its International Comparison Program (ICP).

Facts:

• International Comparison Program(ICP): It is the largest worldwide data-collection initiative managed by the World Bank under the guidance of the UN Statistical Commission(UNSC).
• Objective: 
  • To produce purchasing power parities(PPPs) and comparable price level indexes(PLIs) for participating economies.
  • Convert volume and per capita measures of gross domestic product(GDP) and its expenditure components into a common currency using PPPs. 
• India and ICP: India has participated in almost all ICP rounds since its inception in 1970.It has also been a co-Chair of the ICP Governing Board along with Statistics Austria for the ICP 2017 cycle.

Key Takeaways:

• India has retained its position as the third-largest economy in the world in terms of purchasing power parity (PPP) behind the US and China.
• India accounts for 6.7% of the world’s total of $119,547 billion of global Gross Domestic Product(GDP) in terms of PPP compared to 16.4 % in case of China and 16.3 % for the US.
• The PPPs of Indian Rupee per US$ at Gross Domestic Product(GDP) level is now 20.65 in 2017 from 15.55 in 2011.The Exchange Rate of US Dollar to Indian Rupee is now 65.12 from 46.67 during the same period. 
• In the Asia-Pacific Region, India retained its regional position as the second largest economy accounted for 20.83 % in terms of PPPs where China was first at 50.76% and Indonesia at 7.49% was third.

Additional Facts:

• PPP: It is the 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.