Can India GDP hit 7.3 Trillion$ in 2022?????

[WAR-rior]

This is precisely the reason PPP is meaningless. PPP is useful only when it comes to the domestic service sector (hair cut, massage, for examples). However, in international trade, we do not use PPP value as a currency. When you compare country to country, you compare the national economic output in relation to each other set by global value standard (for example, a laptop will cost $1000 dollars in real money not PPP money in China, US, or India) , and the best measure is the trade prices of goods, and thus we use nominal GDP set by currency exchange rate.

Dude, PPP to nominal GDP results in a Multipler factor. this factor is again division of (PPP exchange rate/ Exchange rate) ie. (p/e). Now what u said was bout 'e'........Wud u care to talk bout 'p' too.

Please do that, then we will talk more.

 

[Jade]

This is precisely the reason PPP is meaningless. PPP is useful only when it comes to the domestic service sector (hair cut, massage, for examples). However, in international trade, we do not use PPP value as a currency. When you compare country to country, you compare the national economic output in relation to each other set by global value standard (for example, a laptop will cost $1000 dollars in real money not PPP money in China, US, or India) , and the best measure is the trade prices of goods, and thus we use nominal GDP set by currency exchange rate.

But why would you want to compare, a hair cut in India is not what it costs in US.

GDP(PPP) is the real purchasing power of the people while GDP(Nominal) is not

 

[Chinese-Dragon]

Dude, PPP to nominal GDP results in a Multipler factor. this factor is again division of (PPP exchange rate/ Exchange rate) ie. (p/e). Now what u said was bout 'e'........Wud u care to talk bout 'p' too.

Please do that, then we will talk more.

I'll give you the IMF quote again:

"The IMF considers that GDP in purchase-power-parity (PPP) terms is not the most appropriate measure for comparing the relative size of countries to the global economy, because PPP price levels are influenced by non-traded services, which are more relevant domestically than globally," the IMF said.

"The Fund believes that GDP at market rates is a more relevant comparison."

edition.cnn.com/2011/BUSINESS/04/26/us.china.economy/index.html

They said it very clearly.

They did NOT give any special exceptions to India.

 

[conworldus]

But why would you want to compare, a hair cut in India is not what it costs in US.

GDP(PPP) is the real purchasing power of the people while GDP(Nominal) is not

No. PPP is the purchasing power in relation to your own domestic services. However, you don't have the purchasing power in international trade. Therefore, PPP can only be used domestically comparing to yourself (how much you have progressed). Internationally, it means nothing. You need hard currency to make purchases.

 

[WAR-rior]

In more simpler words, If commodities in your country cost you same as that of the parent country for international currency, ie. USA. then ur PPP == nominal.

For china, the costs are more closer to that in USA. Inflation being one of the biggest factor past 2 decades. Thas why we see PPP GDP vs nominal GDP for china isnt too far from each other, unlike india which has 3 times PPP GDP than nominal.

Suppose exchange rate decrease more towards being equal to dollar, the price in india will also shift towards that in USA. Hence, PPP will start getting closer to nominal.

Now real growth will only be positive, hence PPP GDP will be more than today. Hence Nominal GDP will be more closer to PPP. Hence, nominal GDP growth wud become much much more.

PS : Real GDP relates to PPP GDP as it takes count of real goods rather than money exchange for a country.

 

[RoYaL~GuJJaR]

Well i think this also depends on who will come into power after 2014, If BJP wins and NaMo will be elected as PM(Which is Most likely) then i am sure growth trajectory will head towards north. But even though if it happens still Indian economy wont hit $7.3 trillion dollars because of several reasons and one of them is during the period of 2002-12 china's growth rate was +11% even touched 14% , so if you will consider Euro crises and slow down in world economy it is highly unlikely for India to reach and maintain 11% growth for 10 years straight.

Even china now is growing @ 7.5% now which is just 2.5% higher then our current growth rate. So in my opinion we will be around $5 Trillion mark at our best in 2022.

 

[Chinese-Dragon]

For china, the costs are more closer to that in USA.

You must be joking?

The only thing that comes close is property prices in the major cities. But for everything else it is nowhere close.

Even here in HK (which is classified as an advanced economy), things are way cheaper than in the West. For locals anyway, since tourists usually go to the tourist hotspots and end up paying a lot.

 

[WAR-rior]

I'll give you the IMF quote again:



edition.cnn.com/2011/BUSINESS/04/26/us.china.economy/index.html

They said it very clearly.

They did NOT give any special exceptions to India.

Thats true. But how does that affect anything that we do in India. What you showed is for International comparisions especially when you do Trade. Thats where currency rate matters and hence the nominal GDP.

But do you know Nominal GDP cannot be calculated directly. .

Steps say :

1. Calculate PPP GDP
2. Multiple it by the (p/e) factor
3. You get nominal GDP
4. Now compare for ranking.

Hence you see, I have calculated PPP GDP. now I was predicting the p and e for India in 2022. This will give me my nominal GDP.

Hope you get what I am saying till now.

 

[dollarman]

There is noway India is going to hit 7.3 trillion. MAybe 4 trillion is do-able, 5 if we are lucky...

 

[WAR-rior]

You must be joking?

The only thing that comes close is property prices in the major cities. But for everything else it is nowhere close.

Even here in HK (which is classified as an advanced economy), things are way cheaper than in the West. For locals anyway, tourists usually go to the tourist hotspots and end up paying a lot.

Dude, I am saying closer as compared to India.

Otherwise, if it was almost same than Chinese GDP PPP == Nominal GDP. and currency exchange rate was almost equal to $1.

There is noway India is going to hit 7.3 trillion. MAybe 4 trillion is do-able, 5 if we are lucky...

Dont say that until you give me GDP PPP for 2022. then we wud see what will be the nominal GDP.

 

[Jade]

No. PPP is the purchasing power in relation to your own domestic services. However, you don't have the purchasing power in international trade. Therefore, PPP can only be used domestically comparing to yourself (how much you have progressed). Internationally, it means nothing. You need hard currency to make purchases.

yes, Indian economy being predominantly domestic, PPP is apt for India. Why should a common Indian take dollar as a base when he buys in rupees

 

[Jade]

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[Chinese-Dragon]

Dont say that until you give me GDP PPP for 2022. then we wud see what will be the nominal GDP.

Just do a simple compound interest formula, to see how many years of growing at 5-10% it will take for 1.5 trillion to reach 7.3 trillion.

 

[Jade]

You must be joking?

The only thing that comes close is property prices in the major cities. But for everything else it is nowhere close.

Even here in HK (which is classified as an advanced economy), things are way cheaper than in the West. For locals anyway, since tourists usually go to the tourist hotspots and end up paying a lot.

Exactly, the price level are different in US and China, hence the purchasing power.

For China 25% of GDP is through your exports, While for India it is less than 10%. Hence PPP is apt for India

 

[WAR-rior]

Just do a simple compound interest formula, to see how many years of growing at 5-10% it will take for 1.5 trillion to reach 7.3 trillion.

Nopes. YOu wud get zero if you do that calculation.

5-10 % is the real growth. rite?

Real GDP after calculation give GDP PPP ($) in terms of unit boxes of commodities.

Now this GDP PPP after multiplying by (p/e) gives nominal GDP.

NOw do focus on p/e and how it changes.

Ever taught why Chinese nominal GDP was going 15+% past decade ?