Recently China surpassed Japan to become the second largest economy in the world. Chinese economy has witnessed a spectacular growth since it initiated economic reforms in 1978. So who are the other top economies in the world and how the calculation is made? Continue reading below to unfold.
The economic volume of a country is measured by GDP. There are two methods of GDP calculation:
i. Nominal GDP Method – this method compares countries using current exchange rates to analyze their clout within the global market.
ii. Purchasing Power Parity or PPP GDP Method – PPP GDP method judges economies on the basis of their purchasing power, i.e. how much a country can buy in one dollar compared to others.
PPP GDP method is more and often found better to estimate the internal size of each market. The list bellow shows the world’s 10 largest economies with their approximate GDP based on Purchasing Power Parity (PPP).
1. United States of America
6. United Kingdom