What is GDP Per Capita?
GDP Per Capita Definition?
Gross Domestic Product, or GDP, is the total value of all goods and services produced within a country’s borders during a period of time, usually annually.
GDP per capita, or gross domestic product per capita, measures the approximate value of a country’s GDP being contributed by each member of its population.
It is calculated by taking a country’s GDP and dividing it by the country’s population.
GDP per capita is often used in conjunction with GDP as a measurement of a country’s economic health and overall prosperity.
A high GDP usually correlates with a high standard of living.
Highest GDP Per Capita in The World
GDP per capita is highly sensitive to variations in population size.
For example, as of 2019, Luxembourg had a total GDP of $64.45 billion, ranking 69th highest in the world.
However, given its population is only about 600,000 citizens, its GDP per capita is over $113,000; the highest of any country worldwide.
What Does GDP Per Capita Mean?
If a nation’s population growth outpaces a nation’s economic growth, the GDP per capita will be negative, even if the nation’s economic growth is positive.
This phenomenon may occur in developing countries; even as the country’s economy grows, the population growth may outpace it, resulting in a lowered standard of living.