Gross domestic product (GDP) is a measurement that describes the value of a geographic location’s total goods and services, and how it relates to the population of the region. GDP per capita is an evolution of this metric, and is obtained by dividing a country's GDP by its population. The value that results from this calculation is the country's GDP per capita. The GDP per capita varies drastically from one country to the next. The GDP of a country is dependent upon the country’s economic standing and overall profits compared to expenses.
Although it is expressed as a dollar amount per resident, GDP per capita is not a measure of the average or median personal income of a given country's people. Rather, it is a measure of the relative health of that country’s overall economy and industry.
Top 10 Countries with the Highest GDP per Capita (US Dollars)*:
| Rank | Country/Territory | GDP per Capita (US$) |
|---|---|---|
| 1 | Monaco | 234,317 |
| 2 | Liechtenstein | 169,260 |
| 3 | Luxembourg | 133,175 |
| 4 | Bermuda | 112,653 |
| 5 | Ireland | 101,109 |
| 6 | Switzerland | 93,525 |
| 7 | Norway | 89,242 |
| not a country | Cayman Islands (UK territory) | 85,250 |
| 8 | United States | 69,185 |
| 9 | Iceland | 69,133 |
| 10 | Denmark | 68,037 |
* Data sourced from United Nations, data year 2021.
10 Countries with the Lowest GDP per Capita in the World (US Dollars)*:
| Rank | Country/Territory | GDP per Capita (US$) |
|---|---|---|
| 1 | Yemen | 302 |
| 2 | Burundi | 311 |
| 3 | Afghanistan | 373 |
| 4 | South Sudan | 400 |
| 5 | Somalia | 447 |
| 6 | Sudan | 453 |
| 7 | Central African Republic | 461 |
| 8 | Liberia | 471 |
| 9 | Mozambique | 492 |
| 10 | Madagascar | 500 |
Techniques for expressing GDP per capita
GDP per capita is typically expressed in one of two ways: nominal and at PPP (purchasing power parity). While very similar, there is one crucial difference between the two methodologies. GDP per capita (nominal) is a raw figure that does not take into account the differences in the cost of living between one country and another. In contrast, GDP per capita (PPP) factors in each country’s relative cost of living and inflation rate. This makes it arguably more accurate with regard to country-to-country comparisons.
Problems with GDP per capita and the usefulness of GNI
Although widely considered a valuable metric, GDP can be distorted by certain economic conditions. In particular, countries whose tax laws enable them to become corporate "tax havens" often have wildly inflated GDP measurements thanks to an influx of foreign funds flowing through the country's economy. Ireland may be the most widely cited example, but the list of tax haven countries also includes Switzerland, the Netherlands, Luxembourg, Hong Kong, Puerto Rico, Singapore, the Cayman Islands, Bermuda, the British Virgin Islands, and more.
To help compensate for this distortion of GDP, many economists also view a country's Gross National Product (GNP), or a related metric, Gross National Income (GNI). These metrics closely resemble GDP, but are calculated slightly differently, which enables them to better account for the economic activity of tax haven countries. Thus, examining GDP per capita alongside a metric such as GNI per capita can give clearer insight into a country's true economic health.