GDP Just 53% of India's? Growth Surpasses US!

• Article
• 2024-07-30
• 18 Comments

President Putin said that Russia's economic strength has already ranked first in Europe and fourth globally.

The latest statistical data also show that Russia's economic growth rate reached 4.7% in the first half of this year, far higher than the United States' 3.0%.

Among the countries at the forefront globally, when compared by economic growth rate, Russia's GDP growth is only behind India and China.

In the first half of this year, India's growth rate was 7.2%, and China's growth rate was 5.0%.

So, how did Russia's claim of being ranked fourth come about?

Obviously, Putin strongly disagrees with the overvaluation of the US dollar; in his view, the actual purchasing power of the dollar is much lower than the surface data suggests.

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Therefore, Putin is more inclined to agree with another international comparison method, which is ranking by purchasing power.

If ranked by PPP (Purchasing Power Parity), China is first, the United States is second, India is third, and Russia has indeed reached fourth place.

From this perspective, Russia's economic performance is indeed surprising.

Ukraine, which is involved in the war, has a negative economic growth, and Israel, also in a state of war, has seen a significant drop in GDP.

However, Russia's GDP grew last year, and the GDP in the first half of this year also grew.

Moreover, Russia's unemployment rate is as low as 2.4%.

Despite the ongoing war, consumption at home has not decreased at all.

This has led the Central Bank of Russia to raise interest rates by 100 basis points to curb overheating consumption and inflation.

On this basis alone, Russia is far superior to the United States.

The United States has just made a decision to lower interest rates by 50 basis points, and the unexpected rate cut indicates that the US economy is in dire need of monetary stimulus.

However, if calculated by the traditional GDP converted to US dollars, the United States' GDP reached $14.12 trillion in the first half of this year, still at the top of the list.

China's GDP, after conversion, is $8.68 trillion, ranking second.

Both Germany and Japan have negative year-on-year growth rates in the first half of this year, with Germany down by 0.2% and Japan down by 0.9%.

Currently, these two countries rank third and fourth respectively.

Next is India, with a GDP of $1.87 trillion, which means that Russia's GDP is about 53% of India's.

Following are the United Kingdom, France, Italy, Brazil, and Canada.

Russia's GDP ranks eleventh in the first half of this year, with a total GDP of $987.6 billion, while Canada, ranked tenth, has a GDP of $1.061 trillion, and Mexico, ranked twelfth, has a GDP of $962.5 billion.

This means that Russia's ranking could either move up or be pulled down.

In fact, this situation has occurred before.

After the Federal Reserve began to raise interest rates in 2022, the US dollar index rose to a maximum of 114, and the currencies of various countries depreciated significantly, with the yen, euro, and pound all falling.

That year, coincidentally, the Russia-Ukraine conflict broke out, but surprisingly, the Russian ruble fell and then rose, and it was the second-largest currency in terms of appreciation in 2022, only behind the US dollar.

As a result, Russia's GDP, when converted to US dollars, entered the top 10 globally.

Now that the US dollar has begun to lower interest rates, the exchange rates of various countries against the US dollar may undergo significant changes in the coming period, which could very likely affect the GDP rankings in the short term.