What are the richest countries in the world?

An analysis of the world’s richest countries shows that living standards are high in countries with strong currencies, even though prices are higher as a result of higher labor productivity.

Earth globe with country flags surrounded by coin slips

Rich countries have strong currencies

By a classic measure, GDP per capita shows individual economic prosperity. But comparing countries by this measure alone does not tell the whole story. To get a better idea of ​​living standards, Visual Capitalist compiled a list of 26 countries around the world according to three different measures, based on data from The Economist and Sondre Solstad. All figures are in US dollars.

GDP per capita

As the table below shows, smaller countries fare much better – of the top 10 richest countries, eight of them have a population of less than 10 million.

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Luxembourg, whose financial sector accounts for 25% of GDP, is the richest country in the world by GDP per capita.

With a population of just 660,000, the country is also considered a tax haven, encouraging foreign investment due to its favorable tax policies. Due to the considerable wealth of this small nation, its citizens enjoy free education, healthcare and transportation.

Bermuda, like Luxembourg, is known as a tax haven. Several multinationals shelter billions of dollars in the island nation – including Google, which moved $23 billion into a shell company in 2017 to reduce foreign tax costs.

With a GDP per capita of $82,808, Singapore is the richest country in Asia due to its role as a global center for finance, trade and tourism.

Purchasing Power Parity (PPP)

Another way to compare countries adjusts GDP per capita based on the relative price of goods and services to account for differences in the cost of living and the strength of the local currency.

This provides a clearer comparison of living standards between countries, as one dollar can buy more goods in different countries. Below, we show how countries perform differently on this measure, known as purchasing power parity (PPP)-adjusted GDP per capita:

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As can be seen, Singapore rises significantly in the ranking when adjusted for PPP.

This analysis of the world’s richest countries shows that living standards are high in Singapore because their currency can go further than in other countries. Often, richer countries will have higher prices as a result of higher labor productivity, advanced technology, and other factors.

Similarly, the United Arab Emirates climbs into the top 10, surpassing both Switzerland and America. As one of the world’s largest oil-producing countries, it has earned $100 billion in oil revenue in 2022, which equates to about $100,000 per citizen.

How the ranking changes when productivity is taken into account

To analyze this, GDP per capita on a PPP basis is adjusted for estimated hours worked per person. Economies that have high-quality, productive labor forces and strong living standards tend to rank well using this measure.

In this case, Norway has the best ranking globally. This strong result is likely influenced by the fact that they work fewer hours compared to the US population due to higher vacation pay, among other factors.

Meanwhile, the US ranks 11th when adjusted for hours worked, with Western European nations mainly ahead of them in the rankings. Similarly, countries such as the Netherlands, Singapore, Hong Kong and Brunei fall when adjusted for working hours.

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Barack
As an experienced journalist, expert in useful tips, I have a passion for providing valuable information and practical guides to a wide audience. My articles are characterized by thorough research and verification of reliable sources that ensure the quality and accuracy of every information I provide
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