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Global Economic Growth Continues at Expense of Ecological Systems
In 2007, gross world product (GWP)—the aggregated total of all finished goods and services produced worldwide—was expected to grow 5.4 percent to $72.3 trillion (in 2007 dollars).1 (See Figure 1.) This estimate reflects actual purchasing power in countries (that is, in purchasing power parity or PPP terms). The market exchange rate GWP, which is based on straightforward monetary terms, was expected to reach $53.4 trillion, an increase of 8 percent since 2006.2 The projected growth of GWP (PPP) in 2007 was revised downward from earlier estimates due particularly to economic disruptions in the U.S. housing market, which also had ripple effects in other countries, particularly within Europe and in Japan.3 Even with this late-term contraction, growth in 2007 was still expected to be higher than the average since 1970.4 (See Figure 2.)
The U.S. economy was projected to grow 2.1 percent in 2007, nearly 1 percent slower than the previous year.5 This significant contraction came in large part from the turmoil felt in the subprime mortgage sector, with foreclosures, reductions in residential investments, and declining housing values reducing growth as well as consumer confidence.6 Rising gasoline prices also had a significant impact.7 U.S. economic growth is expected to slow further in 2008.8
Although the U.S. economy still accounts for 19 percent of the world total, China is closing the gap—now accounting for 16 percent of GWP, up from 15 percent in 2006.9 China’s gross domestic product (GDP) grew dramatically in 2007, jumping an estimated 11.7 percent and making up one third of the projected $3.7 trillion in GWP growth in 2007.10 Increases in exports and investments drove this expansion.11
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