World GDP over the past 12 months was about $65 trillion. In the year to September 2013, global output will be about $10 trillion bigger, according to the IMF’s projections. But where will that next $10 trillion be added? That depends on the size of a country’s economy, its growth rate and the appreciation of its real exchange rate. Focusing on any one of those things, to the exclusion of the others, can be a misleading guide to a market's potential. For example, China’s economy in 2013 will still be smaller than America’s. But because it is growing so fast, it will add $1.65 trillion compared to America’s $1.43 trillion. Japan—a slow-growing economy—will contribute $410 billion, less than Russia ($698 billion) or Brazil ($461 billion). But because Japan is so big, it will still contribute more than India ($392 billion).
Source: www.economist.com
Vivek Agrawal
Summer Intern-Fundamental Analysis
DENIP Consultants Private Limited.
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