Gross domestic product data released on Thursday shows that the U.S. has pulled further ahead of China in the race for world¡¯s biggest economy, thanks in part to vibrant American consumers.
U.S. GDP rose 6.3% in nominal terms ¡ª that is, unadjusted for inflation ¡ª last year, outpacing China¡¯s 4.6% gain. While some of the outperformance reflected America¡¯s elevated price increases, the 2023 outturn underscores a broader point: The U.S. economy is emerging from the pandemic period in a better place than China¡¯s.
"It is a striking turn of fortunes,¡± said Eswar Prasad, who once led the International Monetary Fund¡¯s China team and is now at Cornell University. "The strong performance of the U.S. economy, in tandem with all the short-term and long-term headwinds the Chinese economy is facing, renders it a less obvious proposition that China¡¯s GDP will someday overtake that of the U.S..¡±
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