The world economy grew by 4.9 percent in 2005, down slightly from the 30-year high of 5.3 percent in 2004. Leading the expansion were China, growing by 10.2 percent, and India at 8.5 percent. This recent rapid growth is a continuation of half a century of economic expansion.
Gross world product, the total value of all goods and services produced, increased from $7 trillion in 1950 to $61 trillion in 2005, based on purchasing power parity (PPP). Annual income per person rose from $2,923 to $9,440 during this period. Early projections for 2006 and 2007 show sustained growth of roughly 5 percent.
Rapid growth in developing Asia is fueling the current expansion. China's $9.4 trillion economy continued to expand in 2005. The country's 10.2 percent growth was the fastest of the past decade and half a percentage point higher than the 9.7 percent average since 1980. India's 8.5-percent growth was fueled by rising exports and lively manufacturing and services sectors. Elsewhere in Asia, the newly industrialized Asian economies -- South Korea, Taiwan, Hong Kong, and Singapore -- expanded by 4.5 percent, down from 5.9 percent in 2004. Japan, the world's third largest economy, grew by 2.6 percent, the fastest rate in the last decade, driven by rising employment, strong domestic demand, and export growth. (See data at www.earthpolicy.org/Indicators/Econ/2006_data.htm.)