To figure out where a country stands financially, finding out its GDP is not enough.
Gross domestic product is the total of all services and goods that a country produces in a year. Countries with the largest GDP are the United States, China, Japan, and Germany. However, countries that are tiny dots on the map like Singapore and Luxembourg would not stand anywhere if only GDP was a measure of wealth.
GDP does not take into consideration wealth distribution as well. Therefore, a more accurate way to evaluate is to divide the GDP by the population of the country i.e. per capita GDP.
However, this type of measurement has its own problems. An income can buy much less in one country than in the other. Hence, it is also important to judge how much a country’s residents can buy with their income. GDP has to be adjusted for the nation’s purchasing power parity. Inflation is taken into account as well.
Global Finance reports that it is better for countries to not only be rich but also be egalitarian because economic inequality affects countries alike eventually and hinders growth.
Keeping these in mind the world’s top 10 richest countries are the following:
1. Luxembourg
2. Singapore
3. Ireland
4. Qatar
5. Macao SAR
6. Switzerland
7. United Arab Emirates
8. Norway
9. United States
10. Brunei Darussalam
According to the same measures, the poorest countries in the world are the following:
1. Liberia
2. Madagascar
3. Chad
4. Malawi
5. Mozambique
6. Niger
7. Somalia
8. Democratic Republic of the Congo
9. Central African Republic
10. South Sudan
11. Burundi
Afghanistan, Lebanon, Syria, and Ukraine whose data is either unstable or not available also make it to the list of poor countries.
