What Is GDP Per Capita?

GDP Per Capita Explained

© The Balance, 2018

The gross domestic product per capita, or GDP per capita, is a measure of a country's economic output that accounts for its number of people. It divides the country's gross domestic product by its total population.

Here, we'll explain more about what the GDP is, plus we'll provide context on how a country's overall GDP doesn't always accurately show how prosperous a country is for those living there.

What Is GDP Per Capita?

A country's GDP or gross domestic product is calculated by taking into account the monetary worth of a nation's goods and services after a certain period of time, usually one year. It's a measure of economic activity.

Then, this amount of wealth is divided among a given country's population to solve for its GDP per capita.

How Does GDP Per Capita Work?

Essentially, GDP per capita acts as a metric for determining a country's economic output per each person living there. Often times, rich nations with smaller populations tend to have higher per capita GDP. Once you do the math, the wealth is spread among less people, which raises a country's GDP.

The fact that the GDP per capita divides a country's economic output by its total population makes it a good measurement of a country's standard of living, especially since it tells you how prosperous a country feels to each of its citizens.

How to Calculate GDP Per Capita

The formula is GDP divided by population, or GDP/Population. If you’re looking at just one point in time in one country, then you can use regular, “nominal” GDP divided by the current population. “Nominal” means GDP per capita is measured in current dollars.

If you want to compare GDP per capita between countries, you must use purchasing power parity. That creates parity, or equality, between economies by comparing a basket of similar goods. It's a complicated formula that values a country's currency by what it can buy in that country, not just by its value as measured by its exchange rates.

Economies and GDP Per Capita

The U.S. GDP was $21.43 trillion in 2019. But one reason America is so prosperous is that it has so many people.

The United States is the third most populous country after China and India. The United States had to spread its wealth among 328.2 million people in 2019. As a result, the 2019 U.S. GDP per capita hovered around $65,000. That makes it one of the most prosperous countries per person.

GDP per capita allows you to compare the prosperity of countries with different population sizes.  

When talking about China, the most populous country on earth, it produced a GDP of $27.31 trillion (factoring in purchasing power parity) in 2019. But its GDP per capita was only $19,098 because it has more than four times the number of people as the United States. It's the most populous country in the world, with 1.43 billion people. 

The European Union is the world's second most prosperous economy, at $22.7 trillion in 2019. It's an economy made up of 27 separate countries. Its GDP per capita was only $43,206 because it must spread the wealth among 513.5 million people for that year.

In 2019, India's GDP was $11 trillion but spread among its 1.38 billion people, its GDP per capita was $7,971. 

Countries With Highest GDP Per Capita in 2019

The countries with the highest economic production per person have thriving economies and few residents. The top 10 GDP per capita according to Statistics Times are:

  1. Luxembourg: $113,197
  2. Switzerland: $83,717
  3. Macao: $81,152
  4. Norway: $77,976
  5. Ireland: $77,771
  6. Qatar: $69,688
  7. Iceland: $67,037
  8. United States: $65,112
  9. Singapore: $63,987
  10. Denmark: $59,795

Countries With Lowest GDP Per Capita in 2019

The world's poorest countries, as measured by GDP per capita (Statistics Times), are:

  1. South Sudan: $275
  2. Burundi: $310
  3. Eritrea: $343
  4. Malawi: $371
  5. Niger: $405
  6. Central African Republic: $448
  7. Madagascar: $464
  8. Mozambique: $485
  9. Democratic Republic of the Congo: $501
  10. Afghanistan: $513

Key Takeaways

  • GDP per capita is a country’s economic output divided by its population.
  • It's a good representation of a country's standard of living. 
  • It also describes how much citizens benefit from their country's economy. 
  • Purchasing power parity compares different countries’ economic output. 

Article Sources

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  2. Worldometer. "China Population (Live)." Accessed July 2, 2020.

  3. The World Bank. “What Is the Difference Between Current and Constant Data?” Accessed July 2, 2020.

  4. International Monetary Fund. "Report for Selected Countries and Subjects." Accessed July 2, 2020.

  5. Statistics Times. "List of Countries by GDP (Nominal) Per Capita." Accessed July 2, 2020.

  6. International Monetary Fund. "Report for Selected Countries and Subjects." Accessed June 21, 2020.

  7. European Union. “The Economy.” Accessed June 21, 2020.

  8. Statista. "European Union: Total Population From 2009 to 2019." Accessed July 2, 2020.

  9. Statista. "India: Gross Domestic Product (Gdp) in Current Prices From 1984 to 2021." Accessed July 2, 2020.

  10. Worldometer. "India Population (Live)." Accessed July 2, 2020.