Countries can be categorized as rich or poor based on various factors. Gross Domestic Product (GDP) is a traditional measure that considers the value of goods and services produced in a country. However, GDP can be affected by population size, with larger populations resulting in higher output. To obtain a more accurate representation of a country’s economic status, it is necessary to consider other factors such as GDP per capita and income adjusted for local prices (PPP).
The Economist uses three key measures to evaluate countries: dollar income per person, income adjusted for local prices (PPP), and income per hour worked. By taking into account these factors, a comprehensive analysis of a country’s financial well-being can be obtained.
The rankings generated by The Economist using these three metrics provide valuable insight into the financial well-being of nations worldwide. By going beyond simple GDP figures and accounting for variables such as price levels and productivity, a clearer picture emerges of how countries compare in terms of economic prosperity.
