Global Finance magazine recently released the 2024 ranking of the wealthiest countries and regions in the world. The United States is ranked ninth, while Taiwan is ranked fourteenth. Surprisingly, many of the wealthiest countries are also among the smallest in the world, with their substantial wealth remaining largely unaffected by factors such as COVID-19, global economic slowdown, and geopolitical turmoil. The small European country of Luxembourg tops the list.
Some very small but very wealthy countries, such as San Marino, Luxembourg, and Switzerland, benefit from their advanced financial sectors and tax systems, attracting foreign investment, skilled professionals, and significant bank deposits. Countries like Qatar and the United Arab Emirates have abundant hydrocarbon or other lucrative natural resources, making them very wealthy as well.
In times of high inflation and geopolitical tensions, what does it really mean for a country to be wealthy? If wealth is measured solely by Gross Domestic Product (GDP), then the United States should come out on top, while smaller countries like Luxembourg may not be able to compete with larger economies. GDP measures the value of all goods and services produced by a country.
However, using GDP alone may not accurately reflect the living conditions of people. Global Finance suggests that dividing the GDP by the population, known as GDP per capita, is a better way to determine the relative poverty or wealth of a country compared to others.
Yet, using GDP per capita still poses a challenge: the same income in some countries may only buy a few things, while in others, it can buy much more. Therefore, to measure how wealthy the citizens of a country are, it is necessary to understand their purchasing power. This is why Global Finance suggests that when comparing GDP per capita across countries, adjustments should be made using purchasing power parity (PPP). This takes into consideration inflation, as well as the prices of goods and services, to better reflect the wealth of people in each country or region.
Based on this evaluation standard, Luxembourg, a small European country, emerges as the wealthiest nation globally with a GDP per capita adjusted by PPP of $143,743.
According to Global Finance, this small country with a population of nearly 670,000 is located in the heart of Europe. Luxembourg utilizes a significant portion of its wealth to provide its people with better housing, healthcare, and education. So far, the people of Luxembourg enjoy the highest living standards in the Eurozone.
The United States, a major economic power, is ranked ninth with a GDP per capita adjusted by PPP of $85,373. For most of the past twenty years, the U.S. has consistently hovered just outside the top ten, entering the top ten for the first time in 2020. The U.S. ranking in 2024 remains the same as in 2023.
The U.S. has maintained strong growth momentum over the past two years. In April of this year, the International Monetary Fund raised its 2024 economic growth forecast for the U.S. to 2.7% (0.6% higher than its previous forecast a few months earlier).
Taiwan is ranked fourteenth with a GDP per capita adjusted by PPP of $76,858. This ranking remains the same as in 2023 and surpasses Hong Kong, which was once considered Asia’s financial center (now fifteenth), as well as advanced Asian economies like South Korea (thirtieth) and Japan (thirty-sixth).
Among the top twenty, European countries occupy ten spots, including Luxembourg (1), Ireland (3), Switzerland (7), San Marino (8), Norway (10), Denmark (12), the Netherlands (16), Iceland (17), Austria (19), and Sweden (20).
Canada is ranked 28th.