GDP per Capita

Total GDP shows the size of an economy, but large countries naturally produce more simply because they have more people. GDP per capita adjusts for population, making it a better measure for comparing living standards between countries or over time.

For example, a country with a GDP of 2,000 billion and a population of 50 million has a GDP per capita of 40,000. A country with a larger GDP but a much bigger population may have a lower GDP per capita, meaning less output per person.

For international comparisons, GDP per capita is often adjusted for purchasing power parity, which accounts for differences in the cost of living. A given income buys more in a country where prices are lower.

GDP per capita is an average and has important limitations. It does not show how income is distributed, so a country with high GDP per capita can still have widespread poverty if income is concentrated among a few. It also excludes unpaid work, environmental damage and many aspects of wellbeing, such as health and leisure time.