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The simple meaning of an "Economy" is that a system which provides living to the peoples. In the congruous manner we mean the world economy, which provides lives to more than six billions of peoples in the world.
The GDP in the purchasing power parity according to 2005 estimation has reached $59.59 trillion with a real growth rate of 4.4%. The per capita GDP of the world has reached $9,300 according to 2005 estimation.
"World Population", A Liability or An Asset For World Economy?
The world economy constitutes a total estimated population of 6,525,170,264 as in July 2006 with a growth rate of 1.14%.
The world population more concentrated in the countries like China and India with more than one billion each was matter of more concern and was a liability to some extent for the world economy just before the adoption of opening policies. But in the present days both the nations being more service sector oriented have shown their respective potentialities of the peoples they hold and finally proved the same as assets.
The global output rose by 4.4% in 2005, which was led by China and India by 9.3% and 7.6%respectively. Both the front line players in the field of world economy have contributed a lot in the recent days.
More over in the economic point of view, the population of the world can be explained from different angles. With regards to the Social point of view the addition of 75 million peoples each year to an already overcrowded globe is exacerbating the problems of pollution, desertification, underemployment, epidemics, and famine.
Service Sector and World GDP
In the present days the composition of world GDP more relies upon the service sector. According to 2004 estimation level, agriculture constitutes 4%, Industry constitutes 32% and the services sector constitute 62% of the total GDP.
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Even the services sector employs around 45% of the total labour force in the world.
Industries In The World Scenario
The Industries sector in the world is dominated by the technology, particularly computers, robotics, telecommunications, medicines and medical equipments. The advances have taken place in OECD nations. But a small portion of non-OECD countries has succeeded in rapidly adjusting to these technological forces. The accelerated development of new industrial (and agricultural) technology is complicating already grim environmental problems.
The growth rate of the industrial production according to estimated 2003 data was at 3%.
Inflation the Global Threat
The rising crude prices have raised the fear of inflation at a faster extent to the world economy. Presently the developed countries experience a rate of 1% to 4%; developing countries 5% to 20% typically. The national inflation rates vary widely in individual cases, from declining prices in Japan to hyperinflation in third World countries like (Zimbabwe). More over the inflation rates have declined for most countries for the last several years, held in check by increasing international competition from several low wage countries (2005 est.).
Challenges Faced By The World Economy
The rising economic performance of the world economy is really one sided when we consider the present global challenges as follows:
- Introduction of the euro as the common currency of much of Western European countries in January 1999 has posed economic risks because of varying levels of income, cultural and political differences among the participating nations of the world.
- The terrorist attacks on the US on 11 September 2001 are a matter of concern to the global economy.
- The opening of war in March 2003 between a US-led coalition and Iraq added new uncertainties to global economic prospects.
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