The IMF has released new GDP (PPP) estimates based on the latest International Comparison Program, where price levels are compared relative to the base year 2017 (the previous such survey was in 2011).
There were some notable changes (h/t commenter Annatar for many of the observations):
- China dropped by 18% from $21.0k to $17.2, this is of course not a decline in Chinese living standards but merely a reflection of the fact that prices are going up very fast there (not anywhere near fast enough to cancel out rapid improvement in living standards, though). Note that Shanghai, Shenzhen, and Beijing are now the world’s 3rd, 5th, and 9th most expensive property markets in the world, respectively.
- German GDP has gone from 73% of Japan’s in 2010 to 79% in 2019, and this latest revision bumps it up to 85%. Quite remarkable, given the population difference (83M vs. 126M).
- Germany is also the only G7 country to keep its GDP per capita relative to the US constant since 2010, also at 85%. France declined from 77% to 72%, the UK from 74% to 70%, Japan from 73% to 66%.
- For obvious reasons, many oil exporters have been adjusted sharply downwards, most especially Iraq, which plummeted 47% from $18.8k to $10.0k. This makes sense, Iraq having Mexico-tier prosperity was always quite implausible.
- Of topical relevance: Azerbaijan fell 24% from $19.2k to $14.5k, while Armenia rose from $11.8k to $13.7k. Looks like it did not take the collapse of oil prices well. And also syncs with my observation that if Azerbaijan wants to get back Karabakh, this period is now as good as any.
- Iran went down from $17.8k to $12.0k.
- Russia fell 11% from $30.8k to $27.4k. Not a catastrophic result, though it has been edged ahead of by some countries it’s usually clustered within (Croatia, Romania, Turkey). It also rules out Russia overtaking Greece in the aftermath of the COVID-19 crisis in 2020, which had previously looked like a distinct possibility.
- Ukraine went up from $10.1k to $12.7k. This makes sense, although Ukrainian living standards are certainly much lower than Russia’s, I have always maintained the differential is 2x, not 3x (as per the old datasets).
- Big improvement for Vietnam from $8.7k (long level pegging with India, then at $9.0k) to $10.8k (way ahead of India at $6.2k). Why they were level pegging in the first place after Vietnam liberalized its economy was a bit of an “HBD puzzle” considering that PISA tests since 2012 have shown it has East Asian-tier human capital, unlike the Thais or even Malays; now there’s an answer of that.
- Czechia is now richer than Italy.
- Romania went from being 12% richer than Bulgaria to 21% richer, with Bulgaria at $23.7k now at the level of Chile (which was also revised downwards like much of Latin America). As I commented before, I don’t have a good idea why Romania is doing so well, going from what was once traditionally one of Europe’s most backwards regions through to the 1990s, to almost V4-tier. Its human capital is typically Balkan, not V4. It’s also had massive brain drain – more so than Bulgaria, AFAIK. I don’t know why it’s doing so well. Or for that matter why Bulgaria is doing so badly.