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GDP per capita is sometimes considered an indicator of an economy¡¯s average material well-being. However, GDP per capita assigns high values to ¡°income-rich¡± economies where the national wealth is not reflected to the same extent in the material well-being of their populations. In addition, an economy¡¯s high value of GDP per capita can, at times, reflect high levels of gross fixed capital formation and collective consumption expenditure by government, as well as a high level of net exports. Actual individual consumption (AIC) per capita is more useful when describing the average material well-being of people within an economy. Using PPP-derived estimates of either measure is important for cross-country comparisons, as they reflect the purchasing power of a consumer for the goods and services they choose to buy.1
Figure 8 shows the distribution of GDP across economies in both 2017 and 2021.2 Economies are arranged in order of increasing GDP per capita and presented as rectangular boxes. The vertical scale corresponds to each economy¡¯s share of the global population. The index of GDP per capita, based on the world set equal to 100, is shown on the horizontal axis. Each economy¡¯s size in terms of relative GDP is thus represented by the area of its box, which is the product of GDP per capita and population.
For each year the dotted line at world = 100 represents the global mean GDP per capita expressed in current PPPs for that year. In 2021 it was $20,271 in 2021 PPPs, and in 2017 the mean was $16,809 in 2017 PPPs. The line¡¯s intersection with the boxes shows the disparity in GDP per capita across the globe for the two years. China¡¯s GDP per capita was lower than the world average in 2017 at $14,750 in 2017 PPPs, but rose above it in 2021, recording $20,407 in 2021 PPPs.
In 2021, Luxembourg had the highest GDP per capita at $137,948, or 680 percent of the world average, and Burundi had the lowest at $981, at around 5 percent.
Figure 9 shows the distribution of AIC in 2021 and 2017. Economies are arranged in order of increasing AIC per capita and presented as rectangular boxes. Again, the vertical scale corresponds to each economy¡¯s share of the global population. AIC per capita is shown on the horizontal axis. Each economy¡¯s size in terms of AIC is thus represented by the area of its box. In 2021, the United States had the highest level of AIC per capita, at $52,654, and the Democratic Republic of Congo had the lowest, at $689. The global mean AIC per capita in 2021 was $12,948.
Figure 10 compares PPP-based GDP per capita with PPP-based AIC per capita for the 12 economies with the highest GDP per capita in 2021. In the top four economies, as well as Brunei Darussalam, AIC as a share of GDP ranged from 25 percent to 34 percent, indicating ¡°income-rich¡± economies, where the national wealth is not reflected to the same extent in the average consumption levels of their populations.
Figure 11 shows the variability in the index of PPP-based per capita measures of GDP and its major expenditure components across regions and income groups based on world = 100. The high expenditure on gross fixed capital formation (GFCF) in China was reflected in a relatively high GFCF per capita index of 145 for the East Asia and Pacific region. Sub-Saharan Africa and the low-income group of economies were well below the world average, with an index of 15 and 6 respectively for GFCF per capita. Europe and Central Asia and the high-income group of economies all spent nearly three times as much on a per capita basis as the world average on consumption expenditure by government.
1/ PPPs are statistical estimates and should be treated as approximations of true values, subject to sampling, measurement, and classification errors. They should not be used as indicators of currency under- or overvaluation. ICP Results are based on data supplied by participating economies to the global and regional implementing agencies, and produced in accordance with ICP methodology. Results are not deemed to be national official statistics.
2/ The standard ICP methodology between the two most recent 2017 and 2021 ICP cycles has been maintained. However, in ICP 2021, the Commonwealth of Independent States (CIS) region was linked through the standard global core list approach, unlike in ICP 2017, when the CIS region was linked through the Russian Federation, which participated in both the OECD and CIS comparisons. For ICP 2017, the Russian Federation¡¯s results are based on the OECD comparison, and for ICP 2021, they are based on the CIS comparison. Furthermore, the Asia and Pacific region moved to the standard ICP approach for estimating housing PPPs based on rental and volume data during the ICP 2021 cycle. The standard approach was utilized for the revised ICP 2017 results and ICP 2021 results, both at the regional and global levels, instead of the previously utilized reference volume approach.