GDP Current Affairs
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Standard Chartered Plc, a multinational company has made long term forecasts about the shake-up of the world’s gross domestic product (GDP) rankings. The key elements of the forecast are:
- Seven of the world’s top 10 economies by 2030 most likely would be emerging markets of the present.
- China would become the largest economy by 2020, based on purchasing power parity exchange rates and nominal GDP.
- India’s GDP would be most likely larger than the US in 2020 based on purchasing power parity exchange rates and nominal GDP.
- Indonesia will break into the top 5 economies by 2020.
- The study projects that India’s growth would accelerate to 7.8% by the 2020s.
- China’s growth would moderate to 5% by 2030 reflecting a natural slowdown given the size of the economy.
- The share of Asia in global GDP which is about 28% would further increase to 35% by 2030. This would be equal to the combined share of Euro area and US.
Standard Chartered Plc has undertaken the long-term growth forecasts based on one key principle that countries’ share of world GDP should eventually converge with their share of the world’s population, driven by the convergence of per capita GDP between advanced and emerging economies.
Gross domestic product
Gross domestic product (GDP) is the market monetary value of all the final goods and services produced in a period of time, often annually or quarterly. It is the measure of the nation’s overall economic activity.
Standard Chartered Plc
Standard Chartered Plc is a British multinational banking and financial services company headquartered in London, England. Standard Chartered Plc is a universal bank with operations in consumer, corporate and institutional banking, and treasury services.
As per the data released by the Ministry of Statistics, India registered 7.1% growth in the financial year 2016-17, which is slower than the 8% registered in 2015-16. In the fourth quarter of 2016-17, India registered a growth of GDP growth of 6.1% compared with China’s 6.9% in the same period. Hence, it has lost its fastest-growing major economy tag in the fourth quarter of 2016-17.
A decline is also visible in the Gross value added (GVA) growth. It was 6.6% for 2016-17 and 5.6% in the Q4 of 2016-17, compared with 7.9% in 2015-16 and 8.7% in Q4 of that year. The GDP growth rate has registered a slightly higher growth because of proportionate increase in indirect tax net of subsidies.
While GDP gives a picture of whole economy, GVA gives pictures at enterprises, government and households levels. In other words, GDP is GVA of all enterprises, government and households. Further, Gross Value Added (GVA) broadly reflects the supply or production side of the economy.
The GDP numbers have been computed based on the new 2011-12 base year recently adopted for data including the Index of Industrial Production (IIP) and Wholesale Price Index (WPI).
The demonetisation drive of the government had an adverse impact on the economy. The GDP growth got reduced in Q3 and Q4 when compared with the growth rates in the beginning of the year.
GVA growth also registered a slow down in almost every sector in Q4 of 2016-17 when compared with the growth registered in the corresponding period of the previous year.
Capital formation was also relatively soft with growth below 30%.