The West remains a centre of wealth, finance and technology. Yet most people live elsewhere, and emerging economies now account for a larger share of global output when measured by what money can buy locally. The balance of economic power is changing, even if it is changing slowly.
Two ways to measure the world
At market exchange rates, advanced economies still command an enormous share of global GDP. Their higher incomes, deep capital markets and valuable companies give them influence far beyond their share of the world’s population.
Purchasing power parity, or PPP, offers another view. It adjusts for differences in local prices, making it useful for comparing the volume of goods and services economies produce. On that measure, emerging and developing economies make up the larger part of world output.
Neither measure cancels out the other. Market exchange rates matter when countries buy imports, service foreign debt or invest abroad. PPP helps show where economic activity takes place. Together, they reveal a world in which financial power remains concentrated while production and consumption are spread more widely.
Growth is shifting the balance
The difference becomes clearer in the IMF’s July 2026 outlook. It projects growth of 1.7% for advanced economies this year, compared with 3.8% for emerging and developing economies. Emerging and developing Asia is projected to grow by 5.0%, and sub-Saharan Africa by 4.3%. Latin America and the Caribbean is expected to grow more slowly, at 2.4%. These are regional averages; individual countries face very different conditions.
Faster growth does not mean that income gaps will close quickly. A wealthy economy can grow slowly and still generate far more income per person than a poorer one. But when larger populations combine with sustained growth, their weight in global demand rises over time.
A wider economic centre of gravity
That shift affects decisions well beyond government statistics. Companies deciding where to build, sell and invest must pay attention to customers in Asia, Africa and Latin America. Growing cities need housing, transport, energy and financial services. More local demand can also support businesses built to serve their own regions.
The West will remain rich and influential. Its financial markets, technology and accumulated capital will continue to shape the world economy.
But wealth today and growth tomorrow are different questions. The West still holds a remarkable share of the first. An increasing share of the second lies elsewhere.
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Emerging Markets First.
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