Thought for the day

When America Becomes No 3


 
Last updated: 2 June 2024
 
China's GDP is already significantly larger than US GDP. India is likely to overtake the US within a decade, making the USA no 3 in the world. China's GDP will be almost twice that of the US, and India's is likely to be about 30% larger than today. A very different new world is developing much faster than most investors understand.

Tomorrow's world will be very different to today's
GDP PPP, Int$, Trillions (2013-2040)
When America Becomes No 3



These statements are based on measuring GDP in Purchasing Power Parity terms, adding estimates for the fact that both China and India have larger Informal economies than the US, and that both use out of date Base Years to compute GDP.

Nothing is certain about such estimates. GDP data from both China and India is rated C (use with caution) by World Economics, and far from perfect. Any number of factors may derail economic growth in these countries over the next decade. But the fact is that Asian countries are growing faster than western countries (see table below), and it appears very likely that India and China in particular are likely to continue to outpace America and other countries in the West.

Compound Annual Growth Rate (CAGR) & Share of Global GDP Growth
Using GDP PPP for 2013-2023
Compound Annual Growth Rate (CAGR) & Share of Global GDP Growth

It may take longer than a decade for America to fall to the number 3 slot in the global GDP hierarchy, but the possibility also exists the change may happen faster...

More on China and India
The worlds biggest economy ; America or China
China v USA: The real growth story
Some reasons why China GDP is likely to continue growing
India Contributed Approximately 15% of Global GDP Growth in the Past Decade 



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