The European Union has been confirmed as the world’s third largest economy in a new study that compared the size of different economies’ GDP when expressed in purchasing power standards (PPS).

PPS is an artificial currency unit that can theoretically buy the same amount of goods and services in each country. Since the same products can be purchased for different prices when crossing the border into another country, the PPS is then adjusted to arrive at a figure that can be compared across different nations and regions.

The exercise was done by the International Comparison Programme and is based on data provided by the EU for 2021.

The results show that the EU represented 15.2 per cent of world GDP in 2021.

The largest economy in the world in 2021 was China with about 18.9 per cent of world GDP. The United States was the second largest, with 15.5 per cent of world GDP. The EU was in third place.

Among the 20 countries in the world with a share larger than one per cent of the world GDP expressed in PPS, there were five EU countries: Germany (3.4 per cent), France (2.4 per cent), Italy (1.9 per cent), Spain (1.4 per cent) and Poland (one per cent).

They collectively contributed about 10.1 per cent to world GDP.

Looking at GDP per capita for the world’s 20 largest economies in 2021, only six countries were above the EU average: the United States, Germany, Australia, Canada, France and the United Kingdom.

While the Chinese economy was the largest in terms of GDP in PPS, GDP per capita was only 39 per cent of the EU average.

There was a nine-fold difference between the highest and the lowest GDP per capita among the world’s 20 largest economies (the United States at 137 per cent of the EU average compared with India at 15 per cent of the EU average).

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