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 — that is, unadjusted for inflation — 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..”