China may overtake America as the world biggest economy earlier than expected, by the end of this year, rather than by 2019.
New data from the International Comparison Programme, a UN statistical database which compares purchasing power across borders and currencies, indicates China’s size may have been underestimated.
The Economist says China’s purchasing power parities (PPP) is now up to 20% higher than economists had previously estimated in the 2005 survey.
And, according to The Economist’s calculations, China will now take the crown as the world’s largest economy by the end of 2014.
Some estimates put China’s GDP at $7.5 trillion compared to America at $15 trillion.
However, China’s growth is, and has been for years, streaking ahead of the US and the rest of the world. The IMF currently shows real GDP (Gross Domestic Product) for the US in 2014 growing at 2.8% compared to China’s 7.5%.
Previous calculations using IMF numbers had China overtaking America in 2019. Other estimates using OECD (Organisation for Economic Cooperation and Development) numbers had the takeover point happening in 2016.