WASHINGTON—For the first time in more than a century, the U.S. economy is no longer the world’s largest.
The International Monetary Fund has released numbers showing that when national economic output is measured in “real” terms of goods and services, China will produce $17.6 trillion this year, versus $17.4 trillion for the United States. The IMF noted the growth has come quickly, as recently as 2000 the U.S. economy was still producing nearly three times larger. China now accounts for 16.5% of the world economy, compared to 16.3% for the U.S. One caveat, according to some: the Chinese numbers could overstate output.
The new figures are based on what is called “purchasing power parity,” or PPP, which measures actual output as opposed to fluctuations in foreign exchange rates.
By a different measure, however, the U.S. economy remains largest. Using international exchange rates, the U.S. economy is significantly larger than China’s, although many economists dismiss that metric.
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