World’s 20 Richest Countries by GDP (PPP) per Capita
In this piece, we will take a look at the world's 20 richest countries by GDP (PPP) per capita. If you want to skip our overview of the global economic environment, then head on over to World's 5 Richest Countries by GDP (PPP) per Capita.
The global economy has undergone several shocks over the last couple of years, starting with the outbreak of the coronavirus. Global economic responses to the virus have changed our economic environment in significant ways, with the shocks still being felt even though four years have passed since its outbreak as well as more than a year since the burden on hospitals and infections dropped significantly to resume the economy and leisure activities.
However, the virus might not have disrupted economies as badly as it has if it were not for recent events. 2022 was actually off to an optimistic start as economic activity started to resume and global supply chain pressures started to ease out. In fact, the rapid interest rate hikes by both the Federal Reserve in the U.S. and central banks all over the world might have been less in magnitude had the Russian invasion of Ukraine last year not further upended the global balance of commodity supply and demand to simply set the prices for essential goods on fire.
With the invasion now reaching its second anniversary, the world and its economy have had time to adjust. And inflation, which soared to record high levels last year, is coming down all over. Yet, the cost of bringing this inflation down will have an impact on global economic growth. This is because in order to bring inflation down, central banks had to increase interest rates, and naturally, this doesn't bode too well for either consumer spending or corporate functioning.
Estimates from the United Nations' Trade and Development report show that global economic growth is set to slow down to 2.4% in 2023 from 3% in 2022 as the toll of high interest rates and inflation makes its mark. Narrowing our focus on the G7 economies, the UNCTAD's calculations show that compared in real terms to GDP levels in 2019, most countries are only marginally better off. The data ascribes an index value of 100 to all economies before the pandemic, and its data shows that while the U.S.'s GDP as of the second quarter of 2023 has a value of 106.7, economies of Italy, France, Japan, and Germany have readings of 101.4, 101.3, 100.6, and 100.5, respectively. In fact, Canada's GDP, for which the latest data is for the first quarter, stood at 104 while Britain was the only country that is still worse off than at the start of the pandemic in economic terms since it has an index value of 99.7. As a consolation for the Brits, the British economy was also the hardest hit by the pandemic, as it had the lowest index value of 76.9 with France being the second hardest hit.
Due to globalization, supply chains all over the world are tightly interlinked, and when it comes to economic giants such as China or the U.S., any reverberations in their local economies are often felt globally. Starting from the U.S., a slowdown in America impacts the world, with the biggest case study for this being quite recent since it happened in 2008. At the same time, the U.S. Treasury market, which is made of securities issued by the U.S. government, is the go to choice for risk free investments since the ability of the U.S. government to pay its debt is virtually guaranteed. However, government shutdowns or even their threat in the U.S. end up turning on the 'risk off' global button as capital flows away from riskier assets such as stocks traded in America and Europe to the ultimate safe haven asset, the U.S. dollar.
Similarly, while America has industrialized, China is still moving full steam ahead with transforming and growing its manufacturing, engineering, and construction sectors. This means that the Chinese demand for commodities in particular to fuel its development shapes global trends, and should this demand drop, then the implications are felt all over. Given the recent turbulence in the world economy, we don't have to look too far back for an example of the Chinese impact on global commodities either. One great example is the turmoil in the crude oil market, which had based demand expectations on China's recovery at the start of 2023, but as this recovery slowed down, oil prices first shot up as Saudi Arabia reduced production and then stabilized later on as some Chinese industrial data showed that the Asian giant's recovery is indeed taking place.
The third major economic region in the world after Asia and North America is Europe. For Europe, the impact of the Russian invasion has been particularly painful, especially for the region's largest economy Germany, and the financial powerhouse, U.K. Germany had come to rely on cheap Russian gas to fuel its manufacturing operations, but the fallout of the Russian war has seen it scuttle to diversify and lose economic growth in the process. The picture is quite bleak on the German front, as an exclusive and fresh report from Reuters shows that the German government expects the economy to shrink by 0.4% in 2023.
So, as the world soldiers on after facing multiple shocks in just a couple of years, which are the richest countries right now? We took a look so head on below for more.
Pixabay/Public Domain
Our Methodology
To make our list of the world's richest countries by GDP per capita, we used data from the International Monetary Front (IMF) that lists down global GDP per capita by country. Purchasing Power Parity (PPP) figures are used, and as a simple definition, these are computed by removing price differences by equating the price of a basket of essentials in the local currency to the U.S. Dollar.
World's 20 Richest Countries by GDP (PPP) per Capita
20. Commonwealth of Australia
GDP Per Capita In 2023: $65,366
The Commonwealth of Australia is an Oceanic country that is one of the largest in the world in terms of area. Australia is one of the most developed nations in the world, and it has vast amounts of natural resources of crucial minerals such as lithium and copper.
19. Kingdom of Belgium
GDP Per Capita In 2023: $65,501
The Kingdom of Belgium is a prosperous European nation. It ranks 24 on the list of countries with the highest GDP in purchasing power parity (PPP) terms. The Belgian economy is worth $723 billion, and economic figures often see its GDP per capita concentrated in its capital Brussels since most people commute to the city for work.
18. Kingdom of Sweden
GDP Per Capita In 2023: $65,842
The Kingdom of Sweden is a prosperous Nordic country. It is one of the few first world nations in the world and has well developed public healthcare and education systems.
17. Federal Republic of Germany
GDP Per Capita In 2023: $66,132
The Federal Republic of Germany is the largest economy in Europe due to its strong industrial base which commands major product markets such as automobiles, globally. It also has a strong services sector as well as a well developed tourism industry.
16. Principality of Andorra
GDP Per Capita In 2023: $68,998
Andorra is one of the smallest countries on our list in terms of its population and area. The country covers just 467 square kilometers, and its population of 81,588 also lends it a high GDP per capita.
15. Republic of Austria
GDP Per Capita In 2023: $69,502
The Republic of Austria is a European nation with a GDP of $700 billion. As is the case with several developed countries, it also depends heavily on both services and tourism for its economic productivity.
14. Iceland
GDP Per Capita In 2023: $69,779
Iceland is a European country that is one of the smallest nations in the world in terms of both its population and population density. The country relies on tourism for economic productivity and benefits from a well developed power production industry.
13. Netherlands
GDP Per Capita In 2023: $72,973
The Netherlands is one of the most developed countries in the world, and it has an economy worth $1.2 trillion. It has well developed services and industrial sectors, due to major automakers and financial firms operating from there.
12. Republic of China (Taiwan)
GDP Per Capita In 2023: $73,344
While not recognized as an independent nation globally, Taiwan is still an economic power in its right as it plays a crucial role in the global consumer electronics supply chain. The world's biggest contract chip maker, TSMC, is headquartered there and so are other important electronics companies.
11. Kingdom of Denmark
GDP Per Capita In 2023: $73,386
Denmark is a Nordic European nation which is one of the most stable and peaceful nations in the world. Built on the Scandinavian model, it ranks high in both income equality and human development.
10. Brunei Darussalam
GDP Per Capita In 2023: $75,583
Brunei Darussalam is a Southeast Asian country with a $31.9 billion GDP in PPP terms as of 2022. It is heavily dependent on petroleum exports for its foreign exchange earnings.
9. Republic of San Marino
GDP Per Capita In 2023: $78,926
The Republic of San Marino is another small country that covers just 61.2 square kilometers. It relies heavily on tourism, banking, and electronics for its economic output.
8. United States of America
GDP Per Capita In 2023: $80,035
The U.S. is the largest economy in the world in terms of nominal GDP. However, since a dollar is still a dollar in America, the U.S. drops to number two in the list of countries ranked by their PPP GDP.
7. Kingdom of Norway
GDP Per Capita In 2023: $82,655
The Kingdom of Norway is the final Nordic country on our list. It stands out among developed nations due to the strong presence of the state in key industries such as telecommunications.
6. Swiss Confederation
GDP Per Capita In 2023: $87,963
The Swiss Confederation, or Switzerland is Europe's financial hub and is known the world over for its well developed banking industry.
Click here to continue reading and check out World's 5 Richest Countries by GDP (PPP) per Capita.
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Disclosure: None. World's 20 Richest Countries by GDP (PPP) per Capita is originally published on Insider Monkey.