ISLAMABAD: Pakistan’s gross domestic product (GDP) based on purchasing power parity (PPP) just crossed $1 trillion. By PPP ranking, Pakistan is now the 25th largest economy in the world.
According to the World Data Atlas, Pakistan’s GDP PPP in 2017 is $1,060 billion, with an year-on-year growth of 7.32%. This is the highest-ever increase in a decade.
Over the last 20 years, the GDP based on PPP of Pakistan grew substantially from $313.7 billion in 1997 to $1,060.75 billion in international dollars, rising at an increasing annual rate that reached 7.32% in 2017, according to the World Data Atlas’s new ranking.
According to economists, the GDP purchasing-power-parity compares different countries’ currencies through a market ‘basket of goods’ approach. Two currencies are in PPP when a market basket of goods (taking into account the exchange rate) is priced the same in both countries. For example, what goods 10 dollars can buy in the US, in the UK, or in Pakistan. Or, how much does a burger cost in the US versus its price in Pakistan?
In 1980, Pakistan’s PPP was $71.81 billion. In 2012, the last year of Zardari government, it was $793.85 billion. Following Musharraf’s last year resulting in country bleeding, GDP PPP’s growth hit its worst in Zardari’s first year in government when it reached 1% in 2009.
In the current tenure of Nawaz Sharif’s government, Pakistan’s GDP PPP grew from $856.39 billion in 2013 to current $1,060 billion with an average growth of nearly 5.9%. The real push came in 2016 and 2017 when it first crossed 6% in 2016 and then 7% in 2017.
China is world’s largest economy by GDP PPP. This year, its PPP reached $23.194 trillion.
In 2014, China overtook the US in GDP PPP. Since then, the gap between the two economic powers is increasing by a trillion dollars every year. The US is now at $19.417 trillion, with nearly $4 trillion behind China.
India is world’s third largest economy by GDP PPP. In 2017, India’s PPP stood at $9.489 trillion.
World’s top Muslim economies by GDP PPP are:
1) Indonesia at 7th rank. GDP PPP: $3.2 trillion
2) Turkey at 13th rank. GDP PPP: $2.1 trillion
3) Saudi Arabia at 15th rank. GDP PPP: $1.8 trillion
4) Iran at 18th rank. GDP PPP: $1.5 trillion
5) Egypt at 21st rank. GDP PPP: $1.2 trillion
6) Nigeria at 23rd rank. GDP PPP: $1.1 trillion
7) Malaysia at 26th rank. GDP PPP: $922 billion
8) UAE 32nd rank. GDP PPP: $694 billion
9) Bangladesh 33rd rank. GDP PPP: $687 billion
Future: With $4.2 trillion in size, Pakistan is likely to become the 16th largest economy by GDP PPP in 2050 and 20th largest in 2030, according to PwC, world’s largest accounting firms.
The other measure through which economies are measured is GDP Nominal. Pakistan’s GDP stood at $300 billion in 2017 (official figures yet to be released). By this amount, Pakistan is world’s 40th largest economy. In 2050, Pakistan is set to become the world’s 18th largest economy by GDP, according to Goldman Sachs, world’s largest investment bank.
(Wali Zahid is an award-winning journalist and a blogger at walizahid.com. He is a Pakistan futurist and writes on the economy. He tweets @walizahid).
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