Low- and middle-income economies contribute to over half of the global economy

Over half of total economic activity was in low- and middle-income economies in 2017 while the size of the global economy was nearly $120 trillion.

The International Comparison Program (ICP) on May 19 released new purchasing power parities (PPPs) for reference year 2017 that adjust for differences in the cost of living across economies.

According to the report titled 'Purchasing Power Parities and the Size of World Economies: Results from the 2017 International Comparison Program,' upper and lower middle-income economies account for 34 percent and 16 per cent respectively of global PPPs-based gross domestic product (GDP)for the same year. 

The economies accommodate 36 per cent and 40 per cent of the global population.

The share of global PPP-based GDP for low-income economies, with 8 percent of the global population, was less than 1 percent. 

However, Bangladesh's GDP was $711 billion in the terms of PPPs in 2017, accounted for 0.6 percent of the global economy.  

The two largest economies were China and the United States, each recording a PPP-based GDP of just under $20 trillion in 2017. Together they accounted for one-third of the global economy.
India's GDP stood at $8,051 billion, which was the third-largest economy in the world, followed by Japan, Germany, and the Russian Federation, mentioned the report. 

According to the ICP 2017, ten economies had a PPP-based GDP per capita above $60,000, with 0.5 per cent of the population worldwide. 

Among income groups, PPP-based GDP per capita ranged from one-tenth of the world average for low-income economies to three times the average for high-income economies. 

The ICP 2017 also compares per capita consumption and finds that the US had the highest level at $44,620.

The ICP is one of the world's largest statistical initiatives, coordinated by the World Bank under the auspices of the United Nations Statistical Commission.

"In these difficult months, as we face a global pandemic, it is hard to focus on anything else. Yet measurement remains important, perhaps even more so, especially for these global measures from one of the world's largest international statistical collaborations. As the world recovers, these new numbers will provide an essential benchmark for charting our progress." said Nobel Laureate Sir Angus Deaton, chair, ICP Technical Advisory Group.

"The ICP provides governments with indicators critical for assessing their competitiveness in the global economy and helps them strengthen their statistical capacity and institutional knowledge through a meaningful global partnership," said ICP Governing Board Co-Chairs, Pravin Srivastava, chief statistician of India, and Werner Holzner, director general–statistics, Statistics Austria.

The next ICP comparison will be conducted for reference year 2021.