GDP Per Capita measures the economic output of a country by accounting for its population. It is calculated by dividing the gross domestic product by the population of that country. GDP per capita is the best measurement for the standard of living in a country indicating how prosperous the citizens of a country feel. GDP per capita also allows for the comparison of the prosperity of the different continents of the Earth. GDP per capita of a continent is obtained by adding the GDP per capita of each of the countries making the continent. The GDP per capita of the world can be obtained summing the GDP per capita of the seven continents. As of 2016, the world’s GDP per capita averaged US$ 10,300.
Comparing GDP Per Capita Of Different Continents
GDP per capita of a country is obtained by dividing the GDP by the size of the population. To obtain a fair GDP per capita of a continent, one must use Purchasing Power Parity (PPP) GDP which brings about parity or equality among countries of a continent by considering a set of similar goods. The PPP values a country’s currency by the amount of goods it can purchase in that country and not just by its value thereby removing the exchange rate problem. However, it does not reflect the economic output in international trade.
North America: Continent With The Highest GDP Per Capita
North America has a multifaceted economic system and the largest GDP per capita according to the International Monetary Fund 2016 report. The US, Canada, and Mexico have some of the largest economies in the world promoted by the large gross domestic product. The continent had a cumulative GDP of about $20 trillion against a population of 360 million people. The continent had a GDP per capita (nominal) of US$37,477 in 2016. The US is the largest economy in North America accounting for over 85% of the continent’s gross domestic product.
Africa: Continent With The Lowest GDP Per Capita
Africa is the poorest continent according to GDP per capita. Most of the top ten poorest countries are in Africa with the majority having a per capita GDP of less than $1,500. Africa has an average GDP per capita of 1,809, the lowest of the six continents. Unlike developed economies, poor African countries do not have large markets for their products. Many African countries are also landlocked and rely on other countries to get their goods to the market thus increasing their cost and reducing the competitiveness of their prices.