The World Bank Released Results of International Comparison Program 2021

2024-06-03 14:07 Print| Large| Medium| Small

National Statistical Society of China

May 30 , 2024

The International Comparison Program (ICP) 2021 cycle lasted for more than three years, with the results released on May 30 this year. In the 2021 cycle, overcoming the adverse impact of the COVID-19 pandemic, the National Statistical Society of China (NSSC) organized the ICP surveys in an orderly manner within the global ICP implementation framework and according to the work arrangements and requirements of the World Bank and the Asian Development Bank (ADB). The data collection, validation, evaluation and submission has been completed, contributing to the implementation of the ICP 2021 cycle.

1. The activities conducted by NSSC in the 2021 cycle

In China, ICP is an exploratory and experimental international statistical cooperation program implemented by the NSSC. In 2021, about 16 thousand outlets were selected for price collection in 31 provincal areas across the country. Starting from March 2021, price data of more than 1000 items were collected from Household Price Survey, Machinery and Equipment Price Survey, Construction Price Survey, Housing Rental Survey, and Government Compensation Survey.The NSSC also actively participated in the regional workshops, the ICP Asia Pacific Regional Advisory Meeting and the ICP Technical Advisory Group Meeting. By playing an active role in ICP governance, the NSSC expanded statistical exchanges and cooperation with relevant international organizations, and improved China’s statistical capacity and international influence.

2. Main results

The ICP 2021 involved 176 participating economies around the world. Based on the data they submitted and data from other sources, the World Bank measured indicators such as GDP and GDP per capita in PPP terms of 192 economies.

2.1 The global results

The world’s PPP-based GDP and GDP per capita. According to the World Bank’s calculations, the global GDP was $152.4 trillion, and the global GDP per capita $20271 in PPP terms.

Ranking of major economies by GDP. The top 10 economies by PPP-based GDP in 2021 were China($28.82 trillion), the United States ($23.59 trillion), India ($10.96 trillion), Russia($5.73 trillion), Japan ($5.57 trillion), Germany($5.15 trillion), Brazil ($3.71 trillion), France ($3.65 trillion), the United Kingdom ($3.54 trillion) and Indonesia ($3.53 trillion) . Their combined output accounted for 61.8% of the global economy.

Ranking of major economies by GDP per capita. The top 10 economies by PPP-based GDP per capita in 2021 were Luxembourg, Singapore, Ireland, Qatar, Bermuda, Norway, Switzerland, Brunei Darussalam, Cayman Islands and Macao SAR, China with the highest GDP per capita of $137948, the lowest of $73734, and the average of $97967.

2.2 China’s results

China’s PPP and price level. China’s PPP in 2021 was 3.99, meaning the purchasing power of 3.99 yuan was equal to that of 1 dollar, equivalent to 61.8% of the market exchange rate of the year. China’s price level was 97.9% of the global average.

China’s PPP-based GDP. China’s PPP-based GDP in 2021 was $28.82 trillion (compared with $17.81 trillion in market exchange rate terms), accounting for 18.9% of the global PPP-based GDP (compared with 18.5% in market exchange rate terms).

China’s PPP-based GDP per capita. China’s PPP-based GDP per capita in 2021 was $20407, ranking 85th in the world (compared with $12613 in market exchange rate terms, ranking 72th), equivalent to 100.7 % of the world average.

3. PPP results are not official statistics.

Although the ICP is the world’s largest international statistical cooperation program, and involves the official statistical agencies of many economies, the PPP results are not used as official statistics due to various factors. In Purchasing Power Parities and the Size of the World Economies – Results from the 2017 International Comparison Program, the World Bank specifically states that the PPP results “are produced by the ICP Global Office and regional implementing agencies, based on data supplied by participating economies, and in accordance with the methodology recommended by the ICP Technical Advisory Group and approved by the ICP Governing Board. As such, these results are not produced by participating economies as part of their national official statistics.” The World Bank continues to adhere to this stance for the ICP 2021 results. The World Bank also stresses the limitations of the ICP and advises caution in the use of its results. For example, PPPs cannot be used as a basis for judging the level of a country’s exchange rate, and the international poverty line measured by PPPs cannot be used to directly assess the poverty reduction results of each economy.

4. For developing economies, the GDP in PPP terms differs greatly from that in market exchange rate terms, so the PPP-based results should be viewed with caution.

The results of this and previous rounds reveal a significant difference between the GDP of developing economies in PPP terms and that in market exchange rate terms. For example, among the top 10 economies in the world, China’s PPP-based GDP is 1.62 times its market exchange rate-based GDP; for India, 3.57 times; for Russia, 3.11 times; for Indonesia, 2.98 times; and for Brazil, 2.27 times. In practice, the price relatives between developing economies and developed economies (especially the United States – the benchmark country) will be distorted by various factors, including the different measurement methods they used (in the case that they are located in different regions), differences in their product quality and data quality, resulting in bias in PPP calculations. In addition, for developing economies, non-tradable goods, mainly construction and services, take up a considerable share, whose prices generally fall far below the international average. As a result, when measured by PPPs, these economies’ economic size will be significantly enlarged. Therefore, we need to interpret the PPP-based results with caution and correctly grasp the global economic landscape and the status of each economy in it. It should be pointed out that due to the impact of the COVID-19 pandemic, various economies around the world experienced sharp changes in price during the 2021 cycle, which also had a great impact on the ICP results.

5. China is still the largest developing country in the world.

When measured using PPPs, China’s GDP per capita in 2021 was only equivalent to the world average, ranking 85th in the world. GDP per capita is a basic indicator to measure the development level of a country or region. The average GDP per capita of the 36 developed economies (by IMF standards) participating in the ICP activities was $61055, with the lowest of $32797, and China’s GDP per capita was only 62.2% of their lowest level. This shows that there is still a big gap between China and the developed economies, and China is still the largest developing country in the world.

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