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Naohito Abe, a professor at the Institute of Economic Research at Hitotsubashi University, suggested that the Japanese economy would fall to fifth or sixth place in the world in terms of purchasing power in the World Bank’s classification.
Abe said: “I would not be surprised if the Japanese economy fell to fifth or sixth place in the world in international rankings, taking into account the rapid aging of the population.”
He stated that there are different methods for calculating the purchasing power of the population in major economies, as many economists believe that the classification of the economy should depend on the purchasing power of the population to determine the size of the economy without relying on the value of the output in US dollars.
He added: “Despite the constant reconsideration of the process of calculating purchasing power, international comparison remains a difficult task even today, as a group of goods and services is different in many countries, and if consumer goods are different, adjustments must be made to compare them. But despite the difficulty of this process, “Many experts consider it the best way to compare the sizes of economies.”
He continued: “A new classification of the world’s economies according to purchasing power will be developed in the coming months, and I believe that the purchasing power index in Russia will also be updated.”
He pointed out that in conditions of wars and military operations, the gross domestic product tends to grow, and after crises end, it decreases.
Source: Agencies