The Richest Countries in the World

What do the world’s richest countries have in common?  As becomes clear from Global Finance’s 2016 "Top Ten" list, it helps to have large reserves of hydrocarbons or other natural resources. That is certainly true of gas-rich Qatar, which retains its pole position as the world’s richest nation, as it is of Brunei, Kuwait, Norway and the United Arab Emirates. But lower oil prices have meant that Qataris’ average income decreased by some $15,000 compared to what it had been in 2015, while the figures for Brunei and Kuwait also came in lower than the previous year—in contrast to Norway and the UAE whose more diversified economies helped cushion them from international commodities price-swings.

Three of the other five countries in the list—Luxembourg, Singapore and Switzerland—all benefit from having highly developed financial services sectors and relatively low tax rates that help them attract global wealth flows, and residents of these finance-driven states saw their average wealth grow in 2016. Macao has rebounded on the back of a revival of its casinos and associated tourism. Tiny San Marino again squeezes into the top ten, while larger economies are shut out.      

This underlines the key common attribute amongst the world’s wealthiest countries: they all have small populations compared to countries that lead the world in overall economic output. Most of these small but wealthy nations depend to a large extent on immigrant workers who are not granted resident status. In Europe, they may commute daily from a larger neighbouring country, be it France, Italy or Germany. In the Gulf they come on longer contracts—from South Asia, Europe and other Middle Eastern Countries—but they are rarely granted resident status and therefore are not counted in GDP per capita calculations, even though they may outnumber ‘nationals’ and contribute to most of the country’s economic activity.

The standard methodology for measuring how wealthy a given country is relative to others is to work out what is the average wealth of each resident in that country (GDP per capita). While the commonly accepted measure of the overall size of a country’s economy is total gross domestic product (GDP) – which results in large and populous countries such as the United States, China and Japan at the head of most tables – the methodology preferred by most economists to determine the wealth of a nation is to divide a country’s total GDP by the number of full-time residents.

The result is the commonly used measure of GDP per capita. This is then further refined by applying calculations based on purchasing power parity (PPP), which factors in differing costs of living and relative inflation rates that impact on the real buying power of residents in each country. The resulting, widely accepted measure of how rich a country is relative to others is therefore GDP per capita (PPP).

Values are expressed in current international dollars, reflecting a single year's (the current year) currency exchange rates and PPP adjustments. Data source: International Monetary Fund, World Economic Outlook Database, October 2016

10. San Marino

Current International Dollars:  64,465

Tiny San Marino is the oldest republic in Europe and the fifth smallest country in the world. It may have only 32,000 citizens, but they are among the wealthiest in the world. This is helped by the fact that income tax rates are very low, at about one-third of the EU average. San Marino is, however, working towards harmonising its fiscal laws with EU and international standards. The economy, which relies to a large extent on financial services as well as tourism, has in recent years suffered from difficulties in the banking sector following the economic downturn and there has been a sizeable decline in tax returns – all of which has contributed to negative GDP growth. The economy has also been hit by weakening demand from Italy, which accounts for nearly 90% of its export market for such products as ceramics, clothing, furniture and fabrics. The standard of living of the people of San Marino is seen as comparable to that of the most prosperous regions of surrounding Italy.

9. United Arab Emirates

Current International Dollars:  67,947 | Click To View GDP & Economic Data

The UAE’s increasingly diversified economic base—outside the traditionally dominant hydro-carbon sector—has enabled it to retain its position as one of the best performing economies in the Gulf. The UAE leads the region in terms of infrastructure development with $155 billion of mega-projects already under construction, and a further $629 billion worth of future projects planned. The focus is currently on planning for Dubai’s EXPO 2020 - the biggest event the city has ever hosted which is expected to attract some 25 million overseas visitors. The UAE continues to encourage FDI through a business-friendly regulatory and tax environment, and EXPO 2020 is anticipated to generate foreign investment of between $100 and 150 billion into the tourism, real estate, educational sectors. Meanwhile, the government is working on a new law aimed at attracting more investment into the mining industry. In this optimistic climate the UAE - and in particular Dubai’s highly cosmopolitan population - continues to enjoy considerable wealth, with the total assets (property, cash, equities and business interests) held by individuals in the country reported to exceed $700 billion, the highest in the region.
 

8. Norway

Current International Dollars:  69,031 | Click To View GDP & Economic Data

As western Europe’s top oil and gas producer, Norway has inevitably been hit by the fall in crude prices. The Norwegian government’s response has been to spend a record amount of its petroleum wealth on supporting the economy, reaching for the first time directly into the country’s massive $890 billion sovereign wealth fund.  As it seeks to diversify away from hydro-carbons the government is focussing on a budget for ‘labor, activity and reorganisation’. The structural oil corrected deficit (in other words, oil money spending) is expected to grow from this year’s estimate of over 200 billion kroner. Following the recent recovery in global oil prices, however, the government is expected to roll back some of this financial stimulus. While Norwegian citizens remain on average among the world’s wealthiest with GDP per head (PPP) nearing $70,000 in 2016, there are some signs of unemployment rising amidst weaker consumer confidence.
 

7. Ireland

Current International Dollars:  69,374 | Click To View GDP & Economic Data

Following some politically sensitive reform measures, including sharp cuts in public-sector wages and restructuring of its banking sector, Ireland has regained its fiscal health following the financial crisis of 2008. Today the country’s economy is one of the fastest-growing in the Eurozone, with unemployment at a multi-year low and the manufacturing PMI (Purchasing Managers’ Index) at a post-Brexit high. The strong economic data—which made the people of Ireland the seventh wealthiest in the world in 2016—is, however, largely driven by the financial activities of the many multinational corporations operating in the country, and thus makes the underlying strength of the national economy difficult to assess. Nevertheless, the streamlined regulatory process and attractive rates of corporate taxation—as well as potential Brexit fallout—should continue to facilitate foreign investment, allowing Ireland to retain its position among the world’s richest nations.
 

6. Kuwait

Current International Dollars:  70,587 | Click To View GDP & Economic Data

Despite efforts to modernise and diversify Kuwait’s economy, the international oil price is still the main determinant of the country’s wealth. But some change is now afoot. The implementation of the 2015-20 Five Year Development Plan—the second of its type the government has set in motion to reduce the country’s over-dependence on oil revenues, is already beginning to show its effects. In the latter part of 2016 both capital and industrial goods imports posted double-digit growth.  The financing of the plan is jointly shared between public and private sectors, and has drawn some criticism due to the heavy drag on public finances. This led to the Emir, Sheikh Sabah al-Ahmad al-Sabah, dissolving parliament and calling for snap elections in this, the first Arab country in the Gulf to establish an elected parliament.
 

5. Brunei Darussalam

Current International Dollars:  77,662 | Click To View GDP & Economic Data

Ruled by the Sultan Hassan Bolkiah, the wealthy inhabitants of Brunei are currently experiencing an unusual austerity drive with efforts underway to substantially reduce public spending.  Long dependent upon its rich oil and gas reserves, which it largely exports in crude form to resource hungry neighbours such as Japan and India, the sultanate has recently felt the effects of low global oil prices. Plans are now underway to expand Brunei’s refining capacity, with Chinese investors seeking to establish a new refinery with the capacity to process some 150,000 barrels a day. The government is also seeking to diversify the economy away from its current over-dependence upon the hydro-carbon sector. One example of this is its investing in developing a premium halal brand for beef. However it  will take time before such measures produce any substantial changes in GDP and the budget deficit is projected to expand again in 2017. Despite such concerns, the small south-east Asian state of Brunei Darussalam remains one of the most affluent countries in the world.
 

4. Singapore

Current International Dollars:  86,854 | Click To View GDP & Economic Data

Singapore’s economy contracted in 2016 and the island nation has cut its growth forecasts for 2017. Being both an important financial center and a major trading hub, the city-state is particularly exposed to any weakening of the world’s economic prospects, and especially those of neighbouring China. Nevertheless, Singaporean citizens continued to enjoy one of the highest rates of GDP per capita (PPP) in the world, at nearly $87,000 a head, a slight increase on last year. To offset this, the costs of living also rose slightly, with Singapore ranked as one of the most expensive cities to live in the world. This despite house prices falling for the twelfth consecutive month in the third quarter of 2016, a trend expected to continue due to a large overhanging stock of unsold homes. Manufacturing growth also weakened. On the positive side, tourism is playing an increasingly important role in the economy, largely on the back of the success of Changi, an important international travel hub and a regular award winner as the world’s best airport.

 

3. Macao 

Current International Dollars:  87,845

The economy of this tiny former Portuguese colony that is now a special administrative region of China has always revolved around tourism, and more specifically gambling.  In 2014 Macau’s revenues dipped for the first time since casinos were liberalised twelve years earlier, as high-rolling gamblers became concerned by China’s anti-corruption plans.  The government is concentrating on attracting more recreational gamblers and building on the demand for gaming. In particular, the opening of the $4.1 billion Wynn Palace and the Sands’s $2.7 billion Parisian casino resorts over the next two months should provide opportunities for Macau’s gaming market to expand. After GDP dropped by 20.3 percent in 2015, Macau is now back on the up, Macau’s Gaming Inspection and Coordination Bureau (DICJ) recently announced that the casino gaming revenue of Asia’s premier gaming hub hit $2.3 billion in September, up 7.4% from the same month in the previous year. This continued the positive momentum from previous month, when a 1.1% revenue increase reversed 26 months of decline. In this very particular economy, GDP per capita remains one of the highest in the world.
 

2. Luxembourg

Current International Dollars:  100,991 | Click To View GDP & Economic Data

Luxemburgers topped the $100,000 mark in per capita GDP this year, with an increase of more than $5,000 per head over 2015, making it the country with by far the highest standard of living in the Eurozone. It also has the lowest public debt of any country in the region. The economy which relies heavily on financial services and  has rebounded since the global economic crisis that began in 2008, while the industrial sector, traditionally reliant on steel, has been successfully diversified. Growth is projected to stay robust thanks to both strong domestic demand and rising exports of financial services. Luxembourg has lost some of its status as a favourable tax location due to OECD and EU pressure to reduce banking secrecy, while its own tax revenues have been affected by changes to the ways in which EU members collect taxes from e-commerce. However, Luxembourg continues to enjoy one of the highest current account surpluses as a share of GDP of any country in the Eurozone.
 

1. Qatar

Current International Dollars:  129,512 | Click To View GDP & Economic Data

Income per capita (PPP) has slipped considerably from last year’s figure of $146,011.85 but Qatar nonetheless retains its position as the world’s richest country. Despite the recent dip in oil prices, GDP grew in 2016 on the back of expansion of the country’s non-hydrocarbon economy and a boost from the start-up of the Barzan mega-gas project. The economy has also received support from the bold infrastructure development program associated with Qatar’s hosting the 2022 FIFA World Cup.  Household consumption remains resilient, but looking further ahead the government anticipates a contraction in nominal income. The fiscal and current account surpluses are also expected to decline due to projected lower oil prices and an erosion of hydrocarbon revenues.  The government is committed to diversifying Qatar’s economy to shield it from the vagaries of oil price movements. With its considerable financial reserves the country is well placed to defend its position at the top of the ranking.
 

Gross domestic product (GDP) based on purchasing-power-parity (PPP) per capita.

Values are expressed in current international dollars, to the nearest whole dollar, reflecting a single year's (2018) currency exchange rates and PPP adjustments.​

Source: International Monetary Fund, World Economic Outlook October 2018.