GDP comparisons using PPP are arguably more useful than those using nominal GDP when assessing the domestic market of a state because PPP takes into account the relative cost of local goods, services and inflation rates of the country, rather than using international market exchange rates, which may distort the real differences in per capita income.
https://en.m.wikipedia.org/wiki/List_of_..._GDP_(PPP)
Why Use PPP-adjusted GDP?
First, how is this even calculated? In simple terms: a country’s GDP is converted into a common currency (International dollars) using exchange rates that account for differences in price levels between countries. This ensures that the same basket of goods and services has the same cost across nations, reflecting real economic output.
The upside of using this is that the relative strength of low and middle income countries is accounted for, since costs are lower than their high income counterparts.
This is why India’s PPP-adjusted GDP is so much higher compared to its nominal one.
There are criticisms of this. To create a common basket of goods assumes that people everywhere buy the same types of goods and services, which isn’t always true. Then, the data used for these calculations, especially in developing countries, can be outdated or unreliable.
It also doesn’t account for differences in the quality of products or the structure of different economies. And while adjusting for cost of living can be useful, actual currency exchange rates are still needed for trade and investment decisions, making it less practical in some cases.
https://www.visualcapitalist.com/ranked-...y-gdp-ppp/
(23-01-2025, 03:29 AM)Purikura Wrote: Still living in 2024 when it is already 2025? lolololol!
Same visualcapitalist website source as your image but 2025 version.
Nuff said!
Other sources:
How come third world china lose to USA in everyone of them?
Why third world china white master russia not even in the top 10 GDP lololololol!