AMONG news of an economic slowdown in China and economic challenges in Pakistan, I was surprised to notice the outstanding ratings of both countries on the economic front based on the Purchasing Power Parity (PPP) method. According to the World Bank, China, with an economy of $34.66 trillion, assumed the first position, outperforming the US, which stood in second place with a PPP GDP of $27.72 trillion. According to the World Bank, Pakistan ranked 25th globally with a PPP GDP of $1.50 trillion, outperforming countries like the Netherlands, Argentina, Malaysia, South Africa, Singapore, Switzerland, Israel, Denmark, and many others.
The performance of both China and Pakistan was even more impressive according to data released by the International Monetary Fund (IMF) based on Gross Domestic Product (GDP) measured in Purchasing Power Parity (PPP). According to the IMF, China’s GDP (PPP) was projected at $39.44 trillion, positioning it as the world’s largest economy by PPP, while the United States trailed behind at $30.34 trillion, making it the second-largest economy by PPP. These projections highlight China’s significant economic lead over the United States in PPP terms, with China’s economy expected to be about 30% larger than that of the U.S. in 2025.
According to the IMF, though the prediction about Pakistan’s economy was not as optimistic as that of the World Bank, Pakistan’s projected GDP (PPP) for 2025 is approximately $1.66 trillion, ranking it 26th globally. This places Pakistan ahead of several European countries such as Portugal ($529.9 billion), Greece ($453.4 billion), and the Czech Republic ($645.5 billion), as well as Asian nations like Singapore ($918.4 billion), Malaysia ($1.46 trillion), and the Philippines ($1.48 trillion).
World Economics’ analysis and database provide a broader perspective on GDP figures by incorporating adjustments for the size of the informal economy and outdated base year data.
According to World Economics, China’s GDP (PPP) is estimated to be $42.817 trillion for 2025, capturing the vast informal economy that significantly contributes to its economic activity. This adjusted figure underscores China’s position as the world’s largest economy by PPP, reflecting the expansive informal sector and its unregistered contributions to economic output. Such recalibrations highlight China’s global economic dominance and the scale of activities not captured in official datasets.
World Economics presented one of the most impressive predictions for the year 2025, estimating Pakistan’s GDP at $2.08 trillion, which is 46% larger than the official World Bank estimate of $1.347 trillion for 2023. This revised figure elevates Pakistan’s GDP (PPP) ranking for 2025 to approximately 24th place globally, surpassing many countries of Europe and Africa, South America, and Asia. The adjustment highlights an economy far larger than previously recognized, largely due to the inclusion of Pakistan’s substantial informal sector. This emphasizes the importance of integrating informal activities into formal structures to pro-mote sustainable growth. This adjustment accounts for Pakistan’s substantial informal economy, which includes unre-corded and untaxed transactions that significantly contribute to economic activity. By incor-porating this informal sector and updating the base year for GDP calculations, the revised figure provides a more accurate and comprehensive assessment of Pakistan’s economic size. This re-evaluation strengthens Pakistan’s position in global rankings, highlighting its un-tapped potential and opportunities to formalize and expand its economic base for sustain-able growth.
China’s economic prowess in 2025 is expected to solidify its position as the world’s largest economy by Purchasing Power Parity (PPP), with a projected GDP (PPP) of $34.66 trillion (WB) and 39.44 trillion (IMF) and $42.817 trillion (WE). This dominance is driven by its vast population of over 1.4 billion, providing a significant labour force and consumer market. As the “factory of the world,” China continues to excel in manufacturing, particularly in electronics, machinery, and textiles, while advancing its technological capabilities in robotics, artificial intelligence, and smart manufacturing.
President Xi Jinping’s ideology to transition China’s industries toward quality-oriented production and fundamentally upgrade its industrial infrastructure ensures that the economy remains competitive and innovative. This vision counters predictions of a slowing growth trajectory, highlighting China’s resilience and adaptability in a rapidly evolving global economy. Moreover, initiatives like the Belt and Road Initiative (BRI) expand China’s trade networks, solidify geopolitical influence, and strengthen economic ties across Asia, Africa, and Europe.
China’s leadership in renewable energy, urbanization, and infrastructure strengthens its economic dominance. Leading the world in solar and wind energy production, China aligns with global sustainability goals while ensuring energy security. Its extensive high-speed rail network and the development of smart cities enhance connectivity and trade efficiency. Financially, China’s efforts to internationalize the Yuan and its vast foreign reserves bolster its global monetary influence.
The political stability and policy continuity within China provide a foundation for long-term economic planning. Despite challenges such as slowing population growth and geopolitical tensions, China’s forward-thinking industrial reforms and stable governance ensure its continued economic growth. Pakistan’s economy shows resilience, securing global rankings of 24th to 26th in GDP (PPP), outperforming many major economies. Its young, dynamic population—over 60% under 30—drives growth and a rapidly urbanizing consumer market. The informal economy’s contribution, including unrecorded transactions, reveals a larger economic footprint than official figures suggest. Positioned strategically at the crossroads of South Asia, Central Asia, and the Middle East, Pakistan benefits from the China-Pakistan Economic Corridor (CPEC) as a critical trade route.
A strong agricultural base, natural resources, and emerging sectors like IT and textiles enhance global competitiveness. Remittances from its large Diaspora provide economic stability. Despite challenges, Pakistan shows resilience through structural reforms, governance, and efforts to attract foreign investment, positioning itself as a rising economy with ample growth potential.
Pakistan’s GDP (PPP) is approximately 4.86% of China’s GDP (PPP). While China remains the global economic leader by PPP, Pakistan has the potential to play an influential role in the future with political stability, research investment, and fostering innovation across its sectors.
—The writer is a former Press Secretary to the President of Pakistan.
