The impressive growth of developing nations

Source: The Economist

The combined output of the developing economies accounted for 38% of world GDP (at market exchange rates) in 2010, twice its share in 1990 (see upper chart). On reasonable assumptions, it could exceed the developed world’s within seven years. If GDP is instead measured at purchasing-power parity, which takes account of the fact that lower prices in poorer countries boost real spending power, emerging economies overtook the developed world in 2008 and are likely to reach 54% of world GDP this year. Even more impressive, they accounted for three-quarters of global real GDP growth over the past decade.

The developing economies have been increasingly important in the global economy. They have been relatively untouched by the recent economic problems caused by the European debt crisis. On the other hand, their growth has been largely fueled by exports, with difficulties in developing their internal markets, so that one may not count on the developing nations getting the rich countries out of a major recession.