Top 100 richest countries in the world

What does it mean for a nation to be rich or poor during a global pandemic, high inflation and geopolitical tensions? GDP per capita adjusted for relative purchasing power gives us an idea, albeit an imperfect one.

Would you rather be rich in a poor country or poor in a rich one? Measuring the wealth of nations is not that easy (spoiler: it’s not just about gross domestic product, or GDP). Determining how rich you are in the world’s richest countries depends largely on how rich and poor countries are defined.

If we simply look at a country’s gross domestic product – the sum of all the goods and services produced by a country in one year – then we have to conclude that the richest countries are precisely those with the largest GDP: USA, China, Japan . , Germany. But how could the economy of, for example, Singapore or Luxembourg ever compare to those of such powerful countries if they are just small dots on the world map?

Another problem with GDP is that it does not measure income inequality, which is how a country’s wealth is distributed among its population. That’s why a more accurate picture of people’s living conditions begins by dividing a country’s GDP by the number of people living in it: GDP per capita and its growth rate tell us much more about the social wealth potentially available to each person, and whether that wealth is over time it either increases or decreases.

However, using GDP per capita still poses a problem: the same income can buy very little in some countries and go much further in others, where basic necessities – food, clothing, housing or healthcare – are much cheaper. To assess how rich a country’s citizens are, it is necessary to understand how much they can buy. This is why when comparing GDP per capita across countries, it should be adjusted by purchasing power parity, which helps us take into account the rate of inflation and prices of goods and services in each location.

When considering whether it is better to be rich in a poor country or poor in a rich one, the best chance of achieving a higher standard of living is to live in a richer country, regardless of where one falls on the income distribution scale. Again, wealth for some without a good measure of equality for all is problematic to say the least. The coronavirus pandemic has demonstrated this most clearly. Low-income workers, often migrants, living in some very rich countries suddenly found themselves unemployed, homeless and without any safety net. Meanwhile, many less wealthy countries have struggled to care for everyone in need during the crisis.

In addition, the quality and accessibility of healthcare often goes hand in hand with the quality and accessibility of educational services, social security, housing assistance and other components of social infrastructure. A country may boast of a high GDP or high GDP per capita, but if such services are inadequate or unavailable to a large portion of the population, those citizens will feel poor, regardless of economic performance.

Additionally, when it comes to inflation, since energy and food are essential goods with few substitutes, higher prices are especially painful for low-income households. When prices rise, it’s easier for families to cut or eliminate expenses on electronics, clothing or entertainment, but when it comes to food, heating or transportation, which are critical to both living and earning a living, it becomes much more difficult. As a result, an inflationary scenario can often pose a threat to economic and social stability.

This is why in the long run it is better not only to be rich, but also to be egalitarian. Too much economic inequality holds back growth for everyone, political instability is more likely, health care costs and death rates are higher, and crime and corruption are higher. Being rich in a poor country also has its costs.

Source: International Monetary Fund, World Economic Outlook, April 2024. Values ​​are expressed in current international dollars subject to relevant exchange rates and PPP adjustments.