PPP Projections

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Whilst China’s economy is expected to overtake the USA to become the largest economy in the world in 2027 or thereabouts, many say that China has already reached that No. 1 status if you adjust GDP data for purchasing power parity (PPP), which more accurately accounts for differences in the cost of living between countries – especially in places where labor and goods are cheaper. This point is well illustrated in this infographic.

As explained in the notes, “with PPP, you can see Indonesia ($3.5 trillion) jumps up the ranking by 9 spots to become the #7 ranked economy. Likewise, Turkey ($2.4 trillion) and India ($10.5 trillion) both climb the ranking by 6 and 4 spots respectively. 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”.

Once you’ve got your head around this picture (for 2018), you should then view a more futuristic view of the world in 2030 which will really challenge your thinking about the future. Whilst China’s rise is spectacular, India will be the one to watch!


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