Thursday, December 4, 2014

IMF: America Slipped to No. 2

IMF, America Slipped to No. 2, world economy, PPP, China, US

The United States of America is no longer the top economy, the country has slipped to number 2. China has just overtook the US economy to become the largest in the world. This is the first time that it happened since Ulysses S. Grant was president, the US is no longer the leading economic power on earth. This is a major shift in world affairs.

The International Monetary Fund (IMF) announced the latest numbers for the world economy. They use the measurement of national economic output in “real” terms of goods and services, China this year produce $17.6 trillion against $17.4 trillion of the US.

China now is responsible for 16.5% of the global economy when you use the real purchasing-power measure, compared with 16.3% for the U.S. This is a major economic earthquake. In 2013, China overtook the US for the first time in terms of global trade.

This was already reported by economist that China will overtake the US but it came sooner than expected. Chinese Government has recently decided to bring gross domestic product calculations in accordance with international standards this has revealed economic activity that had previously gone uncounted.

The IMF used the well-established and widely used economic measure known as purchasing-power parity (or PPP).

IMF reports

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