- In 2013 in the US$ 75.6 trillion world gross domestic product (GDP)(at current prices) the share of services improved marginally to 66.0% while growth rate (at constant prices) decelerated marginally to 2.1% over 2012.
- However, in the last twelve years, the share of services in world GDP has declined by 2.8 percentage points (pp). The US ranks first in services GDP as well as in overall GDP, with China and Japan a distant second and third.
- Among the world’s top 15 countries in terms of GDP, India ranked 10th in terms of overall GDP and 11th in terms of services GDP in 2013.
- However, among these top fifteen nations, in the period 2001-13, maximum increase in services share to GDP was recorded by Spain (8.6 pp) followed by India (5.7 pp) and China (5.6 pp).
- During this period, with a compound annual growth rate (CAGR) of 8.7%, India had the second fastest growing services sector, just below China’s 10.7%. Among these top fifteen countries, only China’s share of services in its total GDP is less than 50%.
- As per the International Labour Organization’s (ILO) Global Employment Trends 2014, services accounted for more than half of total global employment growth of 1.4% in 2013 over 2012.
- The share of services in world income declined from 68.8% in 2001 to 66% in 2013, while its share in employment increased from 39.1% to 45.1%.
- For the top fifteen countries, except India and China, the shares of both services GDP and services employment are high and close to each other.
- India’s services sector has a high share in income and relatively low share in employment, while in China, the shares of both services income and services employment are relatively low.
- During 2001-13 the CAGR of world commercial services exports was 10%, with India at the top among the top fifteen largest economies at 20.1% followed by China at 16.5%.
- Services exports of the United States, the largest exporter of commercial services, grew by 5% while they decelerated for China to 7.5% and India to 3.6% due to decline in exports of transport services by 3% in both countries. Services imports of India fell by 2.7% and China’s grew by 17.6%.
- In 2014, global foreign direct investment (FDI) inflows declined by 8% to an estimated US$ 1.3 trillion, due to the fragility of the global economy, policy uncertainty, and geopolitical risks as per the United Nations Conference on Trade and Development (UNCTAD).
- China became the world’s largest recipient of FDI, with an increase of 3% driven by FDI in the services sector while FDI in manufacturing fell. India’s FDI rose by around 26% to an estimated US$ 35 billion also due to inflows in the top services sector as corroborated by the Indian data.
- As per the new method of India’s National Accounts Statistics, the services sector accounting for 51.3% of India’s gross value added (GVA) at basic prices (current prices) in 2013-14, grew by 9.1% compared to 6.6% total GVA growth and 6.9% GDP growth at market prices. Including construction, a borderline service, the services share is 59.6% and growth is 8.1%.
- Interestingly, the services sector has the highest share (54.6%) in the gross capital formation (GCF) of 35.4 lakhs in 2013-14.
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