Gross domestic product (GDP) per capita is an essential economic metric that breaks down a country’s economic output on a per-person basis. By dividing a nation’s GDP by its population, economists gain insights into the prosperity and economic growth of a country. Countries with higher GDP per capita figures typically indicate more industrialization, development, and generally smaller populations compared to others.
Key Takeaways
- Economic Output Measure: GDP per capita represents a country’s economic output per individual.
- Simple Calculation: It’s derived by dividing the total GDP by the nation’s population.
- Comparison Tool: Economists use GDP per capita alongside overall GDP to assess and compare national prosperity and economic health.
- Variable Influences: Both GDP and population affect the GDP per capita calculation.
- Top Performers: Small, affluent countries and developed industrial nations generally have the highest GDP per capita.
Delving Deeper into GDP Per Capita
GDP per capita is universally adopted for gauging national prosperity due to its ease of calculation and the regular tracking of its components. While other measures like per capita income exist, GDP per capita remains more widely used.
On an elementary level, GDP per capita showcases the economic production value attributable to each individual citizen, serving as a reliable indicator of national wealth and prosperity.
Comparing GDP Per Capita and GDP
GDP itself measures the total market value of goods and services produced by a country. Reports such as those issued quarterly by organizations like the Bureau of Economic Analysis (BEA) are closely observed for insight into economic health and productivity comparisons.
While GDP measures overall economic productivity, GDP per capita refines this perspective by considering population size. This makes it an essential tool for understanding economic growth and prosperity more precisely.
U.S. Example: $67,702
As of Q1 2024, the real GDP per capita in the United States stood at $67,702.
Implications of GDP Per Capita
Governments utilize GDP per capita to gauge how economic growth efforts align with population changes. Factors such as technological advances can drive productivity increases, affecting GDP per capita even if population numbers remain constant.
Negative Growth Scenarios
Economic growth without proportional population growth can negatively impact GDP per capita figures in countries with burgeoning populations, particularly in less established economies.
Global Projections and Examples
Global GDP per capita saw an average increase of 2.3% in 2022. Emerging economies like China and India have outpaced this, reflecting robust economic reforms and growth strategies.
The Wealth Spectrum
Highest GDP Per Capita Nations
As of April 2024, the top countries by GDP per capita include:
| Country | GDP Per Capita (USD) |
|---|---|
| Luxembourg | $131,380 |
| Ireland | $106,060 |
| Switzerland | $105,670 |
| Norway | $94,660 |
| Singapore | $88,450 |
| United States | $85,370 |
| Iceland | $84,590 |
| Qatar | $81,400 |
| Macao SAR | $78,960 |
| Denmark | $68,900 |
Nations with Lowest GDP Per Capita
Conversely, nations with the lowest GDP per capita as of April 2024 include:
| Country | GDP Per Capita (USD) |
|---|---|
| Burundi | $230.04 |
| South Sudan | $421.86 |
| Malawi | $480.73 |
| Yemen | $486.38 |
| Sierra Leone | $526.59 |
| Central African Republic | $537.60 |
| Madagascar | $538.18 |
| Sudan | $546.71 |
| Mozambique | $659.10 |
| Niger | $670.10 |
Looking Ahead: Global Economic Growth
The IMF projects global GDP growth at 3.1% for 2024 and 3.2% for 2025, driven by resilient economies in the U.S. and large developing markets.
Conclusion: The Bottom Line
GDP per capita is a fundamental metric for assessing average prosperity and quality of life across nations. By accounting for population sizes, it facilitates meaningful comparisons and insights into economic health.
Frequently Asked Questions
How Is GDP Per Capita Calculated?
GDP per capita is calculated by dividing a country’s GDP by its population, reflecting the standard of living of a nation.
Which Countries Have the Highest GDP Per Capita?
Industrialized and developed nations typically boast the highest GDP per capita. As of April 2024, Luxembourg, Ireland, and Switzerland lead the rankings.
What’s the Difference Between GDP Per Capita and Per Capita Income?
GDP per capita measures national economic output per person, while per capita income assesses money earned per person, indicating living standards and quality of life.
Which Country Has the Lowest GDP Per Capita?
Burundi, South Sudan, and Malawi have the lowest GDP per capita among IMF’s reported countries as of April 2024.
Related Terms: Gross Domestic Product (GDP), Per Capita Income, Economic Productivity.
References
- The World Bank. “Metadata Glossary - GDP Growth (GDP Per Capita Growth)”.
- U.S. Census. “Per Capita Income”.
- World Health Organization. “Gross Domestic Product (GDP) Per Capita and GDP Per Capita Annual Growth Rate”.
- Federal Reserve Bank of St. Louis. “Real Gross Domestic Product Per Capita”.
- Center for Immigration Studies. “There Is No Evidence that Population Growth Drives Per Capita Economic Growth in Developed Economies”.
- The World Bank. “GDP Per Capita Growth (Annual %)”.
- The World Bank. “GDP Per Capita Growth (Annual %) - China, India, World”.
- International Monetary Fund. “GDP Per Capita, Current Prices”.
- International Monetary Fund. “Luxembourg and the IMF”. Select Country Data, Population.
- International Monetary Fund. “Moderating Inflation and Steady Growth Open Path to Soft Landing”.
