Sometime this year, you may have the opportunity to experience an event that’s rarer than a lunar or solar eclipse – an economic eclipse. The United States (US) has had the world’s largest economy since it surpassed Britain’s back in 1872, but the US economy is about to be overshadowed by China’s.
A lot of folks were anticipating an economic eclipse sometime around the end of this decade. As it turns out, the event horizon may be much, much shorter. Last week, The World Bank released its International Comparison Program (ICP) report. Every six years, in an effort to measure the real size of the world economy, the ICP surveys countries and measures their relative economic might. The ICP report was the final analysis of data collected during 2011. It found, at that time, the US had the world’s biggest economy. It also established that China’s economy had grown much faster than the US economy between 2005 and 2011. China’s economic growth has continued to exceed that of the US. As a result, China’s economy is expected to eclipse that of the US during 2014. The US economy will be the second largest and behind the US will be India. The ICP also noted that:
- The six largest middle-income economies (China, India, Russia, Brazil, Indonesia, and Mexico) account for 32.3 percent of world Gross Domestic Product (GDP)
- The six largest high-income economies (United States, Japan, Germany, France, United Kingdom, and Italy) account for 32.9 percent of world GDP
- Asia and the Pacific, including China and India, account for 30 percent of world GDP
- The European Union and countries in the Organization for Economic Cooperation and Development (OECD) account for 54 percent of world GDP
- Latin America comprises 5.5 percent of world GDP (excluding Mexico, which is an OECD country, and Argentina which did not participate in the ICP survey)
Some people are unsettled by the news. Among them, apparently, are members of China’s National Bureau of Statistics (NBS). According to The Washington Post, the NBS expressed reservations about the study’s methodology and did not endorse the results as official statistics. As with solar and lunar eclipses, the event may be notable, but its effects are unclear.