India retains position as third largest economy in PPP, global actual Individual consumption, capital formation

NEW DELHI: 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, the Ministry of Statistics & Programme Implementation (MoSPI) said on Tuesday. India accounts for 6.7% or $8,051 billion, out 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, World Bank data for reference year 2017 show.

The findings are part of the World Bank new PPPs for reference year 2017, under the International Comparison Programme that adjust for differences in the cost of living across economies of the World. Globally 176 economies participated in the 2017 cycle of ICP. The next ICP comparison will be conducted for reference year 2021.

“India is also the third largest economy in terms of its PPP-based share in global Actual Individual Consumption and Global Gross Capital Formation,” MoSPI said.

In the Asia-Pacific Region, in 2017, 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. India is also the second largest economy in terms of its PPP-based share in regional Actual Individual Consumption and regional Gross Capital Formation.

Purchasing Power Parities are vital for converting measures of economic activities to be comparable across economies. India was a co-Chair of the ICP Governing Board along with Statistics Austria for the ICP 2017 cycle, the ministry said.

India, was the third-largest economy, followed by Japan, Germany, and the Russian Federation.

Overall, 19 economies contributed three-quarters of global GDP; three of these economies (India, Indonesia, and the Arab Republic of Egypt) were classified as lower-middle-income economies and six (China, the Russian Federation, Brazil, Mexico, Turkey, and the Islamic Republic of Iran) were classified as upper-middle-income economies, with the remainder classified as high income economies.

“Together, they represented nearly 64% of the global population,” the World Bank said.

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.