China may replace the United States as the world’s largest economy this year. At least that’s what the Financial Times (FT) says, referring to the purchasing power parity data. The US has been the world’s largest economy since 1872, when it overtook Britain. However, most economists predict that China will overtake the US only in 2019.
The FT refers to new data from the international benchmarking program ICP, which found that in 2011 China’s gross domestic product was 87 percent of US economic output. The International Monetary Fund (IMF) projects that China’s economy will grow by 24 percent between 2011 and 2014, while the US economy is expected to grow by only 7.6 percent. “This year, China may overtake the United States in economic performance,” wrote the Financial Times.
ICP program operates under the auspices of the World Bank. It uses purchasing power parity instead of exchange rates to compare economic size, which the paper says better reflects the true value of goods and services. “The US (in 2011) remained the world’s largest economy at purchasing power parity, followed by China,” the program said in its new report.
China, the world’s second-largest economy, will further slow its growth this year
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