The world economy and Latin America

According to the results of the International Comparison Program (ICP), in which ECLAC participates (which published the new Purchasing Power Parities (PPPs) for the 2021 cycle), Latin America and the Caribbean represents 7.3% of global Gross Domestic Product (GDP) and 8% of the world's population. This report is based on data collected during the 2021 cycle, in collaboration with ECLAC.

The results show that the global economy was nearly US$152.4 trillion in PPP terms. More than half of total global output came from low- and middle-income economies.

The world's largest economy in 2021, measured in PPP terms, was China, with a GDP of $28.8 trillion, representing 18.9% of global GDP. The United States ranked second, with nearly $23.6 trillion (15.5% of global GDP), while India ranked third, with $11.0 trillion, representing 7.2%. These three economies represented 41% of the world's population and 42% of global GDP based on PPP terms.

In Latin America and the Caribbean, Brazil, with $3.7 trillion, and Mexico, with $2.7 trillion, were the two largest economies in the region. Together, they contributed 57% of regional GDP, which, in turn, contributed 7.3% of global GDP.

The ICP is one of the most important statistical initiatives globally, coordinated by the World Bank under the auspices of the United Nations Statistical Commission. The 2021 ICP cycle is the tenth comparison conducted since the initiative's launch more than 50 years ago and provides information on 176 participating economies, including 39 countries in Latin America and the Caribbean.

ECLAC has coordinated the implementation of the Program in the region since 2011, although its participation dates back to 2005.

According to these results, globally, the average real GDP per capita for all participating countries was approximately US$20,271 in 2021. The highest level was found in North America (over US$69,423), while the lowest was recorded in Sub-Saharan Africa (just over US$4,430). Around three-quarters of the global population lives in economies with per capita spending below the world average.

For the Latin American and Caribbean region, GDP per capita averaged $18,560, below the global average of $20,271, and with wide heterogeneity across countries.

The report adds that average material well-being, calculated using Effective Individual Consumption (AIC) per capita, was $13,842 for the region, slightly above the world average of $12,948.

In addition, detailed information is presented on other expenditure components, such as investment. In per capita terms, high-income economies spent 2.6 times the world average on investment, while upper-middle-income economies were slightly above the world average. Lower-middle-income economies spent about one-third, and low-income economies less than one-tenth, of the world average per capita investment spending.

The complete data set covering GDP and its main components (household and government consumption expenditures, gross fixed capital formation, and domestic absorption) can be found on the World Bank's PCI results website.