Gross Domestic Product (GDP) per capita is an economic metric that measures a country's economic output per person. It is calculated by dividing the GDP of a nation by its population
. GDP per capita is widely used by economists to gauge the prosperity of nations and is considered a core indicator of economic performance and average living standards
. The World Bank, for example, uses GDP per capita as an indicator for Sustainable Development Goal (SDG) 8, which aims to "promote sustained, inclusive, and sustainable economic growth"
. GDP per capita can be calculated using two methods:
- Current US$ : This method divides the GDP by the midyear population, where GDP is the total value of goods and services for final use produced by resident producers in an economy, regardless of the allocation to domestic and foreign claims
- Purchasing Power Parity (PPP) : This method divides the GDP by the midyear population, where GDP is the total value of goods and services for final use produced by resident producers in an economy, regardless of the allocation to domestic and foreign claims. PPP takes into account the relative cost of living, providing a more accurate picture of the real differences in income
GDP per capita is useful for comparing the economic output and living standards of different countries, as it takes population size into account, allowing easy comparisons between countries with different sizes
. However, it is essential to note that GDP per capita does not provide information on income inequality or the distribution of wealth within a country
