India surpasses Japan to become third-largest world economy in terms of PPP

Asian shares drop
People are reflected in a display showing market indices outside a brokerage in Tokyo, Japan, February 10, 2016 Reuters

India now holds the second largest regional share of Asia and Pacific region's GDP based on purchasing power parity (PPP), with the country's share going up from 14.6% in 2000 to 17.3% in 2017, according to an Asian Development Bank (ADB) report on 'Key Indicators for Asia and the Pacific 2018'.

India displaced Japan, which moved to third place after its share fell to 10.2% in 2017 from 23.1% in 2000. China is at the top with 42.7% share compared to 25.1% in 2000. PPP compares how many goods and services a unit of money can purchase in different countries. While GDP shows the total productive output of a country, PPP compares the value of money in different countries.

China, India and Japan – the three largest economies in Asia and Pacific – account for over 70% of the region's GDP at PPP, up from around 63% in 2000 and more than two fifths of the global GDP in PPP terms, says the report.

Asia and Pacific's share of global output increased from 30.1% in 2000 to 42.6% in 2017, while the share of North America, Europe, South America and the rest of the world declined by 6.8%, 4.7%, 1.3% and 0.3%, respectively.

According to the report, the population of the Asia Pacific region in 2017 was 4.14 billion or 54.8% of the world's population, down from 56% in 2000 and five – including two of the most populous, China (1.39 billion) and India (1.31 billion) – of the 10 most populous economies in the world were from the region.

However, the population in the region is ageing as life expectancy increases and fertility rates decline. It is estimated that in 2050, the number of people over the age of 65 will exceed the number under age of 15.

The report provides a comprehensive set of statistics relating to financial, economic, social and environmental indicators for the 48 regional members of ADB.