PERSPECTIVES By Ruth Lea, Economic Adviser to the Arbuthnot Banking Group Commonwealth countries: future growth markets for UK exports Ruth Lea Economic Adviser Arbuthnot Banking Group ruthlea@arbuthnot.co.uk 07800 608 674 9 th April 2018 Introduction One of Brexit s potential advantages is the UK s freedom to negotiate its own trade deals instead of being dependent on the EU. Of course, trade will continue with the EU after Brexit and the UK- EU future framework for the relationship, likely to focus on the continuation of tariff free trade for goods and a special deal for financial services, is currently being negotiated as part of the Withdrawal Agreement. There is little doubt that the EU will continue to be a major trading partner after Brexit, but it is widely expected that the share of UK exports going to the EU will continue to decline, reflecting the maturity of the EU markets and the continuing decline of the EU s share of global output. New deals are likely to be with countries as diverse as the US and Japan and, of course, individual Commonwealth countries. Australia, for example, has already expressed interest in a free trade agreement. 1 We last analysed the economic prospects of Commonwealth countries in detail at the time of the 2014 Commonwealth Games in Glasgow. 2 Given the current 2018 Commonwealth Games in Australia and the upcoming biennial Commonwealth Heads of Government Meeting (CHOGM), due to be held in London on 16-20 April, it seems a suitable time to update the analysis. The conclusion, that many Commonwealth countries have the potential to be significant growth markets for the UK s exports, is unchanged. Commonwealth countries are rarely considered together as an economic entity. Yet they account for over 17% of world GDP (Purchasing Power Parity terms, 2017, see annex table 1) and contain 2.4 billion of the world s 7½ billion people. 3 Moreover, many Commonwealth countries have favourable demographics compared with several major European countries, where working populations are expected to age and shrink. 4 Today s 53-member Commonwealth spans the five continents and contains developed, emerging and developing economies. 5 It also comprises some of the world s largest economies and many of the smallest. The 12 largest Commonwealth countries account for 95% of total GDP, with the remaining 41 accounting for just 5%. 6 In its diversity it captures the character of the 21 st century globalised economy as no other economic 1
grouping can. The Commonwealth s membership includes two of the world s largest ten economies (the UK and India), two members of the G7 (Canada and the UK) and five members of the G20 (the UK, India, Canada, Australia and South Africa). The Commonwealth: buoyant economic prospects Charts 1a and 1b show the IMF s latest forecasts to 2022 for EU28, the US, China and the Commonwealth in Purchasing Power Parities (PPPs) and at Market Exchange Rates (MERs). The PPP and MER data are the two conventional ways of measuring GDP. They both have their strengths and weaknesses. GDP (PPP) data allow for the relative prices of goods and services, particularly non-tradeables, within an economy. They are, therefore, a better overall measure of the comparative real value of output than data calculated using market exchange rates (MERs). But GDP data at market exchange rates (MERs) provide a better measure of a country s international purchasing power, so relevant for international trade. Exchange rates can fluctuate wildly and currencies can, for example, be overvalued or undervalued for considerable periods of time. Developed countries tend to have a higher GDP in MERs than in PPPs, whilst emerging market and developing countries tend to have a lower GDP in MERs than in PPPs. For example, Australian GDP in 2017 was $1,390bn (MERs) or $1,235bn (PPPs), whilst Indian GDP was $2,439bn (MERs) or $9,447bn (PPPs). But note that as countries get richer, their currencies tend to appreciate and the nominal GDP estimates (MER) tend to converge with the PPP GDP estimates, thus lessening the advantage that developed countries currently have over emerging economies in terms of international purchasing power. Chart 1a (in PPPs) shows how the world economy has changed since 1980 and is projected to have changed by 2022. In 1980 the EU28 countries accounted for 30% of world GDP, whilst the Commonwealth contributed 15%, the US 22% and China just over 2%. By 2017 the EU28 s share dropped to just 16.5%, ahead of the US (over 15%), whilst the Commonwealth had increased its share to over 17% and China had increased its share to over 18%, reflecting China s staggering growth over the past 30 years. The Commonwealth was, therefore, a tad larger than the EU28 in 2017. By 2022, the IMF forecast suggests that the Commonwealth will have made further progress contributing nearly 19% of global output to the EU28 s 15%. The US (14%) will be behind the EU28, whilst China (20.5%) will be the largest bloc. Caution is, however, advised. There are inevitably forecasting errors in these projections. Chart 1b (in MERs) shows how currency effects can affect the GDP data. For example, the strong dollar in 2000 boosted the US s share (in MERs) to over 30%. Inevitably, the forecasts are dependent on forecasts of currency movements, which make them rather non-robust. The decline in the EU28 share in MERs over the forecast period is noticeably less pronounced than in PPPs because, as noted above, GDP in MERs favours developed countries. The rise in the Commonwealth s share is considerably dampened in MER terms, not least of all because the significance of India, where GDP in MER terms is significantly lower than in PPP terms, as already noted. However, it is noticeable that the EU28 s share is still falling and can be expected to continue falling. 2
Chart 1a Shares of world GDP (PPP terms), % 35 30 30.1 25 20 15 21.9 23.6 20.6 15 14.6 18.3 16.5 15.3 17.4 15 14 20.5 18.8 10 7.4 5 0 2.3 1980 2000 2017e 2022f EU28 US China Commonwealth Chart 1b Shares of world GDP (MER terms), % 40 35 30 25 20 15 34.2 25.8 13.8 30.4 26.4 12 24.4 21.6 15.1 22.8 20.3 17.8 13.5 13.9 10 5 2.7 3.6 0 1980 2000 2017e 2022f EU28 US China Commonwealth Source: IMF, World Economic Outlook, database, October 2017. See annex tables 2a and 2b UK-Commonwealth trade Given the relatively buoyant growth prospects in Commonwealth countries, UK export growth prospects to these countries should be favourable, especially if free trade agreements are successfully negotiated. There are two other general points worth noting. The first is the observation that, because of shared history and commonalities of language, law and business practice, it has been estimated that Commonwealth countries trading with one another experience business costs 10-15% lower than similar dealings with non-commonwealth countries of comparable size and GDP. This has been called the Commonwealth advantage. 7 The second point notes that the potential in any export market does not, of course, just reflect the size of the economy. It is also a matter of the relative incomes per capita in various export markets. Especially when it comes to consumer goods, potential consumers need to have the kind of disposable incomes that will allow them to buy the cars, televisions and other goods that have been staples of middle class life in the West for decades. And, on this metric, developed 3
countries still have a very appreciable lead over emerging and developing countries. According to the IMF, income per capita (in 2017) was 7 times as high in Germany as in India in PPP terms, and 24 times as a high in MER terms. The corresponding figures for China are still as high as 3 times and 5 times respectively. But, looking forward, the potential growth of the middle classes in the emerging markets, not least of all in India and China, is expected to change matters radically. A report by Ernst & Young (EY) on this issue concluded: 8 by 2030, so many people will have escaped poverty that the balance of geopolitical power will have completely changed - global trade patterns will be unrecognizable too. Meanwhile, companies accustomed to serving the middle-income brackets of the old Western democracies will need to decide how they can effectively supply the new bourgeois of Africa, Asia and beyond. Specifically concerning China and India, EY said large populations and rapid economic growth mean China and India will become the powerhouses of middle class consumerism over the next two decades. Turning to the UK s current trade with our major Commonwealth partners the main conclusion is that it is still relatively modest compared with the EU. This is not, of course, surprising given the relative size and wealth of many of the EU s members. UK-Commonwealth trade is also modest relative to the US (especially) and, arguably, China. Clearly, there is potential for expansion. Chart 2a shows exports grew by just over 31% to the top eight Commonwealth countries over the decade 2006-2016 compared with total export growth of 40%. 9 Trade with India, Pakistan and South Africa, in particular, was disappointing (see annex table 3). As a consequence, the share of UK exports to these eight Commonwealth destinations actually fell from 7.5% in 2006 to 7.0% in 2016. Commonwealth trade, nevertheless, outstripped the rise of just over 11% to the EU28. Exports to the US (which took over 18% of UK exports in 2016) were up over 55% and exports to China more than tripled, though from a very low base. Other buoyant non-eu markets included Switzerland, Saudi Arabia, the Residual Gulf Arabian Countries and Hong Kong. Chart 2b notes that, even if exports growth to the top eight Commonwealth countries over the past decade has been relatively subdued, at least overall trade has been in small surplus, whereas trade with the EU28 and China is heavily in deficit. Chart 2a UK exports in goods and services, growth between 2006 & 2016 (%) 250 200 211.1 150 100 50 0 40 11.4 73.9 31.4 Total EU Non-EU Commonwealth (8) 55.4 US China Growth (2006-2016) Growth (2006-2016)2 4
Chart 2b Trade (goods and services) balances, 2016 ( bn) 60 40 20 0-20 -40-60 -80-100 -43-82.1 39.1 Total EU Non-EU Commonwealth (8) 2.9 33.3 US China -25.4 bn (2016) bn (2016)2 Source: ONS, UK Balance of Payments, the Pink Book, 2017 edition. See annex table 3. Economic update There have been some useful economic indicators since the last Perspective (see annex table 4 for the economic data tracker). 10 They suggested continuing growth, although March s unseasonably cold weather probably affected output in that month: The much-followed Markit/CIPS surveys suggested continued growth in March overall but activity was adversely affected by poor weather in construction and services. 11-13 Markit commented the UK economy iced up in March. The PMI surveys collectively signal a quarterly GDP growth rate of just under 0.3% in 2018Q1, down from 0.4% in 2017Q4, albeit with the rate of growth sliding to just 0.15% in March alone. The Bank of England s latest Agents summary of business conditions was fairly encouraging. It concluded that robust growth in goods exports had tightened capacity and, together with improving profit margins, strengthened investment intentions in manufacturing slightly. But it added recruitment difficulties remained a primary concern, though the impact on pay growth had been limited and there was some evidence of financial distress in retail and leisure, reflecting weak consumer spending growth. 14 The Bank of England reported that number of mortgage approvals for house purchase slipped to 63,910 in February, compared with January s erratically high 67,110, and were, moreover, lower than the previous six months average (65,162). 15 The Bank also reported that the amount outstanding on unsecured consumer credit rose to 209.4bn, an increase of 9.4% (YOY), compared with January s 9.3%. The amount outstanding now exceeds the 208bn peak of September 2008, prior to the Great Recession. The ONS estimated that services output in the three months to January increased by 0.6% (QOQ), the strongest quarterly growth since 2016Q4, and was 1.3% up (YOY). 16 There was further weakness in the car market. The SMMT reported that car production fell 4.4% (YOY) in February, reflecting a 17.0% fall in home demand. Exports slipped just 0.8% (YOY). 17 New car registrations were down 15.7% (YOY) in March, as diesel cars fell 37.2% (YOY). 18 The SMMT commented that March 2018 was still the fourth highest March ever for the sector. Turning to the latest estimates for 2017Q4 data: 5
The ONS confirmed that GDP increased by 0.4% (QOQ) in 2017Q4 and was 1.4% higher than a year earlier. 19 GDP growth in 2017 was 1.8% (revised from 1.7%), compared with 1.9% in 2016. GDP per head was estimated to have grown 1.2% in 2017, a tad stronger than 2016 s 1.1%. The ONS reported that output per hour increased a buoyant 0.7% (QOQ, revised from 0.8%) in 2017Q4, after a rise of 1.0% (QOQ, revised from 0.9%) in 2017Q3, and was 1.1% higher than a year earlier. 20 Output per hour is the ONS s main measure of labour productivity ( productivity hours ). The quarterly increase reflected the 0.4% increase in GDP in 2017Q4, combined with an estimated 0.3% fall in total hours worked. Comprehensive Balance of Payments data for 2017Q4 were released for the first time. 21 There was a very modest narrowing in the current balance deficit in 2017Q4. There was a deficit of 18.4bn (3.6% of GDP) in the quarter, compared with 19.1bn (3.7% of GDP) in 2017Q3. The ONS pointed out that the 4 th quarter s deficit was the narrowest current account deficit as a percentage of GDP since 2012Q1 when it was 3.1%. The improvement was driven by improved balances on primary income (reflecting higher UK earnings on investment abroad) and secondary income, which more than offset the widening of the trade balance (within which the visible deficit increased whilst the services surplus improved). Within the visible balance, much of the deterioration reflected a worsening oil deficit. The ONS commented while we have no direct evidence, the widening to the trade in goods deficit in oil could be driven partly by the shut-down of the Forties oil pipeline for a large part of December 2017. Finally, we have the OECD s latest (March) forecasts, which remain determinedly downbeat about the UK s economic prospects. 22-23 More generally, the OECD was quite optimistic about the world economy, saying it would continue to strengthen in 2018 and 2019, with global GDP growth projected to rise to 3.9%, from 3.7% in 2017 (see annex table 5). Stronger investment, the rebound in global trade and higher employment were helping to make the recovery increasingly broad-based. New tax reductions and spending increases in the United States and additional fiscal stimulus in Germany were key factors behind the upward revision to global growth prospects in 2018 and 2019 (compared with November). But the UK s growth would be only 1.3% this year, followed by an even weaker 1.1% in 2019. This was the weakest for any of the G20 countries. 24 Even Japan and Italy were expected to perform better (see chart 3). Chart 3 OECD GDP forecasts, growth rates (%) 8 7 6 6.9 6.7 6.4 6.6 7.5 7.2 5 4 3 2 1 2.92.8 2.3 2.5 2.5 2.3 2.4 2.1 2.2 2.2 2 1.9 1.7 1.5 1.5 1.5 1.3 1.1 3 2.2 2 1.7 1.3 1.1 1 2.4 2.2 1.8 1.5 1.5 0 2017 2018 2019 Source: OECD, Economic Outlook, Getting stronger, but tensions are rising, 13 March 2018. 6
Brexit update There have been relatively few Brexit-related developments in the last fortnight. But two are worth noting. The first was a report by the Commons Exiting the EU Committee on The future UK- EU relationship. 25-26 The report recommended that the UK government should not rule out continued membership of the European Economic Area (EEA), which would mean staying in the Single Market with its four freedoms of goods and services and capital and labour. 27 The Government has already made it clear that the UK will be leaving the Single Market, as well as the Customs Union, on Brexit so it is unlikely this recommendation will have much traction. Six of the Committee s members voted against the report. The second development was a statement of clarification by the Bank of England concerning the City and the transition (implementation) period. 28-29 The main points to note were: In light of the agreement at the EU Council [on the transition period on 23 March 30 ], the Bank considers it reasonable for firms currently carrying on regulated activities in the UK by means of passporting rights, or the EU framework for central counterparties, to plan that they will be able to continue undertaking these activities during the implementation period in much the same way as now. In other words, financial firms should take a business as usual approach and assume they will be able to carry on operations as normal until the end of the Brexit transition period. the Bank has made clear to relevant firms that they may plan on the assumption that UK authorisation or recognition will only be needed by the end of the implementation (transition) period. The Government has committed to bring forward legislation, if necessary, to create temporary permission regimes to allow relevant firms to continue their activities in the UK for a limited period after withdrawal. In the unlikely event that the Withdrawal Agreement is not ratified, this provides confidence that a back-stop will be available. The foundation of the Bank of England s approach to preparations for EU withdrawal remains the presumption that there will continue to be a high degree of supervisory cooperation between the UK and the EU. and London remains top global financial centre Despite the City s concerns over Brexit, the Z/Yen think tank confirmed that London has retained its top spot, just ahead of New York, in its latest global financial centres report (table 1). 31-32 Specifically, London came out on top of the rankings for the most competitive business environment, taking into account factors such as the rule of law and the strength of its institutions. 33 The City s reputation also scored higher than any rival, as did the calibre of its financial infrastructure. Brexit remained the top source of uncertainty listed in the report, though the Bank s statement (see above) should provide confidence vis-à-vis the transition period. Far Eastern centres retained the next four slots after London and New York, helped in part by the growing importance of the Chinese economy in international finance. European financial centres, on the whole, did not fare well, with London the only representative among the top 15. The topranked continental European city, Switzerland s Zurich, fell nine places in the ranking, as did German financial capital Frankfurt. Luxembourg slipped seven places. Paris moved up two places to be the 24 th most important global financial centre, but with overall ratings well down on the leaders. 7
Table 1 Leading global financial centres City Rank (change since Rating Change in rating September 2017 in brackets) London 1 (0) 794 14 New York 2 (0) 793 37 Hong Kong 3 (0) 781 37 Singapore 4 (0) 765 23 Tokyo 5 (0) 749 24 Shanghai 6 (0) 741 30 Toronto 7 (0) 728 18 San Francisco 8 (+9) 726 33 Sydney 9 (-1) 724 17 Boston 10 (+9) 722 32 Beijing 11 (-1) 721 18 Melbourne 12 (-1) 720 24 Montreal 13 (-1) 719 22 Chicago 14 (+10) 718 35 Vancouver 15 (+3) 717 25 Zurich 16 (-7) 713 9 Los Angeles 17 (+6) 712 29 Shenzhen 18 (+2) 710 21 Dubai 19 (-1) 709 18 Frankfurt 20 (-9) 708 7 Luxembourg 21 (-7) 701 6 Paris 24 (+2) 687 7 Source: Z/Yen and China Development Institute, The Global Financial Centres Index 23, March 2018, 26 March 2018. 8
References 1. BBC, Australia says yes to post-brexit free trade agreement with the UK, 12 February 2018. 2. Ruth Lea, There s more to the Commonwealth than the Games, Arbuthnot Banking Group Perspective, 14 August 2014. 3. CHOGM 2018 website. 4. Ruth Lea, There s more to the Commonwealth than the Games, Arbuthnot Banking Group Perspective, 14 August 2014. 5. Most are former British colonies/protectorates but some, namely Mozambique, Rwanda and Cameroon, are not. 6. The 12 largest Commonwealth countries (in terms of GDP) are UK, India, Canada, Australia, Nigeria, South Africa, Malaysia, Singapore, Pakistan, Bangladesh, New Zealand and Sri Lanka. 7. Sarianna Lundan and Geoffrey Jones, The Commonwealth Effect and the process of internationalisation, World Economy, January 2001. 8. EY, Hitting the sweet spot: the growth of the middle class in emerging markets, 2013. 9. Exports to the top eight Commonwealth countries: Australia, Canada, India, Malaysia, New Zealand, Pakistan, Singapore and South Africa. 10. Ruth Lea, Brexit: agreement on the transition period, Arbuthnot Banking Group, 26 March 2018, last discussed the economic data. 11. IHS/Markit Manufacturing PMI, UK manufacturing PMI signals steady growth rate at end of opening quarter, 3 April 2018. The Markit/CIPS manufacturing PMI registered 55.1 in March, little changed from February s 55.0, and still fairly robust. 12. IHS/Markit Construction PMI, Snow disruption contributes to fastest drop in construction since July 2016, 4 April 2018. The Markit/CIPS construction PMI fell sharply amid March s unusually bad weather. It was 47.0 in March, compared with February s 51.4, slipping below the 50.0 no-change threshold. 13. IHS/Markit Services PMI, Weakest rise in services activity for 20 months in March, partly linked to snow disruption, 5 April 2018. The Markit/CIPS services PMI slipped to 51.7 in March, compared with February s 54.5, partly linked to snow disruption. 14. Bank of England, Agents summary of business conditions, 2018Q1, 28 March 2018. The report covered the period late December 2017 to late February 2018 and generally made comparisons with activity and prices a year earlier. 15. Bank of England, Money and credit, February 2018, 29 March 2018. 16. ONS, Index of services: January 2018, 29 March 2018. 17. SMMT, UK car manufacturing falls in February, with double-digit decline in domestic demand, 29 March 2018. 18. SMMT, UK new car market falls -15.7% in March as new 18 plate hits roads, 5 April 2018. 19. ONS, Quarterly national accounts, 2017Q4, 29 March 2018. 20. ONS, Labour productivity, 2017Q4, 6 April 2018. Output per worker and output per job both grew by 0.1% in 2017Q4 (QOQ); the difference between these two measures and output per hour reflected a fall in average hours per job and per worker. Earnings and other labour costs growth outpaced productivity growth, resulting in unit labour cost (ULC) growth of 2.1% in 2017Q4 (YOY), compared with 1.4% growth in 2017Q3 (YOY). 21. ONS, Balance of payments, 2017Q4, 29 March 2018. 22. OECD, Economic Outlook, Getting stronger, but tensions are rising, 13 March 2018. 23. Ruth Lea, Brexit negotiations: European Commission satisfied sufficient progress made to proceed to phase 2, Arbuthnot Banking Group, 11 December 2017, discussed the OECD s November 2017 forecast. 24. BBC, UK growth to be slowest in G20 this year, says OECD, 13 March 2018. 9
25. House of Commons, Exiting the EU Committee, The future UK-EU relationship, HC 935, 4 April 2018. 26. BBC, MPs urge free trade area after Brexit - but committee is split, 4 April 2018. 27. Ruth Lea, Should the UK rule out continued membership of the European Economic Area (EEA) after Brexit? Yes, CityAM, 5 April 2018. 28. Bank of England, Update on the regulatory approach to preparations for EU withdrawal, 28 March 2018. 29. CityAM, Bank of England tells financial firms it s business as usual during Brexit transition period, 28 March 2018. 30. Ruth Lea, Brexit: agreement on the transition period, Arbuthnot Banking Group, 26 March 2018, discussed the EU Council s decision on the transition period. 31. Z/Yen and China Development Institute, The Global Financial Centres Index 23, March 2018, 26 March 2018. 32. Ruth Lea, The UK economy: productivity growth continues to disappoint, Arbuthnot Banking Group, 9 October 2017, discussed the September 2017 survey (GFCI22). 33. CityAM, London remains on top of the world for global financial services says major report, 26 March 2018. Annex Table 1 Commonwealth, GDP, $bn, 2017 (estimates), listed by PPP & by MER Listed by PPP, GDP ($bn) Listed by MER, GDP ($bn) Country GDP Cumulative Country GDP Cumulative $500bn+ $500bn+ India 9447 9447 United Kingdom 2565 2565 United Kingdom 2880 12327 India 2439 5004 Canada 1764 14091 Canada 1640 6644 Australia 1235 15326 Australia 1390 8034 Nigeria 1118 16444 Pakistan 1056 17500 Malaysia 926 18426 South Africa 757 19183 Bangladesh 686 19869 Singapore 514 20383 $100bn-$500bn $100bn-$500bn Sri Lanka 278 20661 Nigeria 395 8429 New Zealand 186 20847 South Africa 344 8773 Kenya 163 21010 Malaysia 310 90783 Tanzania 163 21173 Singapore 306 9389 Ghana 130 21303 Pakistan 299, 9688 estimate Bangladesh 250 9938 New Zealand 201 10139 10
$20bn-$100bn $20bn-$100bn Uganda 89 21392 Sri Lanka 84 10223 Cameroon 82 21474 Kenya 78 10301 Zambia 69 21543 Tanzania 52 10353 Trinidad & 43 21586 Ghana 45 10398 Tobago Botswana 40 21626 Cameroon 31 10429 Mozambique 37 21663 Uganda 26 10455 Brunei 33 21696 Zambia 26 10481 Darussalam Cyprus (all 31 21727 Papua New 22 10503 country) Guinea Papua New 31 21758 Cyprus 21 10524 Guinea Namibia 27 21785 Trinidad & 20 10544 Tobago Mauritius 27 21812 Jamaica 26 21838 Rwanda 25 21863 Malawi 22 21885 $5bn-$20bn $5bn-$20bn Malta 19 21904 Botswana 17 10561 Sierra Leone 12 21916 Jamaica 14 10575 Swaziland 11 21927 Namibia 13 10588 The Bahamas 9 21936 Mozambique 12 10600 Fiji 9 21945 Brunei 12 10612 Darussalam Lesotho 7 21952 Mauritius 12 10624 Guyana 6 21958 Malta 12 10636 Barbados 5 21963 The Bahamas 9 10645 Rwanda 9 10654 Malawi 6 10660 Barbados 5 10665 Fiji 5 10670 Under $5bn Under $5bn The Gambia 4 21967 Sierra Leone 4 10674 Seychelles 3 21970 Swaziland 4 10678 Belize 2 21972 Guyana 4 10682 Antigua & 2 21974 Lesotho 3 10685 Barbuda St Lucia 2 21976 Belize 3 10688 St Kitts & Nevis 2 21978 St Lucia 2 10690 Grenada 2 21980 Antigua & 2 10692 Barbuda St Vincent & Grenadines 1 21981 The Gambia 1 10693 11
Solomon Islands 1 21982 Seychelles 1 10694 Samoa 1 21983 Solomon Islands 1 10695 Dominica 1 21984 Grenada 1 10696 Vanuatu 1 21985 St Kitts & Nevis 1 10697 Tonga 1 21986 Samoa 1 10698 Kiribati 0 21986 Vanuatu 1 10699 Tuvalu 0 21986 St Vincent & 1 10700 Grenadines Nauru 0 21986 Dominica 1 10701 Tonga 0 10701 Kiribati 0 10701 Tuvalu 0 10701 Nauru 0 10701 Total Commonwealth (C53), of which: Top 12 countries (C12) Other 41 countries (C41) 21986 10701 20847 (94.8%, inverse 1.055) 10223 10223 (95.5%, inverse 1.047) 1139 (5.2%) 478 (4.5%) World GDP 126634 79281 C53, share of 17.4% 13.5% world GDP Source: IMF, World Economic Outlook, database, October 2017. Table 2a GDP (PPP, $bn), Commonwealth (C53), EU28, US & China 1980 2000 2017e 2022f C wealth top 12 (C12/PPP) in 2017: India 382 2078 9447 15262 United Kingdom 499 1556 2880 3456 Canada 287 911 1764 2133 Australia 155 551 1235 1570 Nigeria (see note) 184 (1990) 276 1118 1349 x0.5=92 Pakistan 72 369 1056 1550 Malaysia 46 300 926 1298 South Africa 135 346 757 918 Bangladesh 42 180 686 1065 Singapore 21 165 514 647 Sri Lanka 17 83 278 393 New Zealand 28 85 186 234 Total C12/PPP (2017) 1868 6900 20847 29875 12
All C wealth (C53/PPP) = C12x1.055 1970 7280 21986 (actual) 31518 EU28 3947 11750 20855 25250 USA 2862 10285 19362 23505 China 306 3699 23122 34465 World GDP 13121 49879 126634 167782 Shares of world GDP: C53/PPP share 15.0% 14.6% 17.4% 18.8% EU28 share 30.1% 23.6% 16.5% 15.0% US share 21.9% 20.6% 15.3% 14.0% China share 2.3% 7.4% 18.3% 20.5% Source: IMF, World Economic Outlook database, October 2017. Notes: 1. 1980 data not available for Nigeria, 1990 figure taken multiplied by 0.5% (ratio of world output, 1980/1990) 2. The C53 totals are calculated as the C12 total x 1.055 for PPPs and C12 total x 1.047 for MERs (see table 1 above). 3. The 2017 and 2022 MER figures for Pakistan = PPP figures for 2017 and 2022 multiplied by the MER/PPP ratio GDP for 2016. 13