To know where a country stands financially, it is not enough to figure out its GDP.
Gross domestic product is the sum of all the services and goods that a country produces in a year. The countries with the highest GDP are USA, China, Japan and Germany. However, countries like Singapore and Luxembourg, which are tiny dots on the map, would stand nowhere if GDP were the only measure of wealth.
GDP also does not take into account the distribution of wealth. Therefore, a more accurate way of doing the assessment is to divide the GDP by the population of the country i.e. GDP per capita.
However, this type of measurement has its own problems. Income can buy much less in one country than in another. Therefore, it is also important to decide how much a country’s residents can buy with their income. GDP has to be adjusted for purchasing power parity of the country. Inflation is also taken into account.
Global Finance The report states that it is better for countries to be not only rich but also equal because economic inequality ultimately affects countries equally and hinders development.
With these in mind, the following are the 10 richest countries in the world:
5. Macau SAR
7. United Arab Emirates
9. United States
10. Brunei Darussalam
According to the same measures, the poorest countries in the world are as follows.
8. Democratic Republic of the Congo
9. Central African Republic
10. South Sudan
Afghanistan, Lebanon, Syria and Ukraine, whose data are either unstable or unavailable, are also included in the list of poor countries.