Formula to Calculate GDP Per Capita of the Country
GDP per capita formula calculates the average of the nation’s economic output when divided by the total population. In other words, it is the equal apportioning of the gross domestic product for each resident to represent the country’s standard of living.
The formula for calculating GDP Per Capita is represented as follows
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For eg:
Source: GDP Per Capita Formula (wallstreetmojo.com)
- GDP per capitaGDP Per CapitaGDP per capita is a parameter that divides a country's GDP by its entire population to determine the economic prosperity of its citizens.read more can be said to be a measure of a nation’s economic output which shall account for its population that is the count of the person.
- The formula divides the nation’s gross domestic product that is the GDP by its number of people, in short, the total population of the nation. This would make a better measurement of a nation’s standard of living.
- Further, if one is looking at just one point in time then Nominal GDPNominal GDPNominal GDP (Gross Domestic Product) is the calculation of annual economic production of the entire country's population at current market prices of goods and services generated by four main sources: land appreciation, labour wages, capital investment interest, and entrepreneur profits calculated only on finished goods and services.read more can be used and if one is comparing across timeline then Real GDP would make better sense.
Examples
Example #1
Country X is a growing small economy. Last year the country has reported its GDP around $400 million and the population of the country as per the last census report available is 200,000. You are required to calculate GDP per capita or the country X.
Solution
Use below given data for calculation of GDP Per Capita.
- GDP of Country X: 400000000
- Population of Country X: 200000
Calculation of GDP Per Capita can be done as follows:
= $400,000,000 / 200,000
GDP Per Capita will be –
- GDP Per Capita = $2000
Therefore, the GDP per capita of country X is $2000.
Example #2
Country MCX is trying to figure out the GDP of the country and also then wants to know what the GDP is and per capita of the country. The statisticStatisticStatistics is the science behind identifying, collecting, organizing and summarizing, analyzing, interpreting, and finally, presenting such data, either qualitative or quantitative, which helps make better and effective decisions with relevance.read more department of the government has provided them with the below data:
Use below given data for calculation of GDP Per Capita.
| Particulars | 2017 | 2018 |
|---|---|---|
| Private Consumption | 1330000000.00 | 1945790000.00 |
| Gross Investment | 465500000.00 | 742938000.00 |
| Government Investment | 6650000000.00 | 9021390000.00 |
| Imports | 997500000.00 | 1180740750.00 |
| Exports | 3325000000.00 | 4554917500.00 |
The elections of the nation are due next year, and the president is concerned if they made growth in GDP per capita? As per the last census conducted, the population of the country is 3,237,450,050. It was estimated that the population since the last census would have grown at 3% and 5% for the year 2017 and 2018 respectively.
Based on available information, you are required to estimate the GDP Per Capita.
Solution
The GDP figure is not mentioned directly here and therefore we shall calculate the GDP of the country first by using the expenditure method in which all the investment is added and only imports are deducted.
GDP of the country for the Year 2017 is as follows
- = (130000000+465500000+6650000000)+3325000000-997500000
- GDP of the Country =10773000000
GDP of the country for the Year 2018 is as follows
- = (1945790000+742938000+9021390000)+4554917500-1180740750
- GDP of the Country = 15084294750
Further, there has been also growth in the population of the country.
The population has grown by 3% and 5% for the year 2017 and 2018 based upon the last census count.
Population of the Country for the Year 2017 is as follows –
- =3237450050*3%
- Population of the Country for the Year 2017 = 97123501.50
Population of the Country for the Year 2018 is as follows –
- =3237450050*5%
- Population of the Country for the Year 2018 = 161872502
Therefore, calculation of GDP Per Capita for the Year 2017 is as follows
=10773000000/97123501.50
GDP Per Capita will be –
- GDP Per Capita = 110.92
Therefore, calculation of GDP Per Capita for the Year 2018 is as follows
=15084294750/161872502.50
GDP Per Capita will be –
- GDP Per Capita = 93.19
Therefore, the GDP per capita of country MCX has diminished from the year 2017.
Example #3
As per the data available on the worldpopulationview.com, the GDP and the population of the various countries are available per below:
Use below given data for calculation of GDP Per Capita.
| Particulars | USA | China | Japan | India | United Kingdom |
|---|---|---|---|---|---|
| GDP | 21410230000000 | 15543710000000 | 5362220000000 | 3155230000000 | 3022580000000 |
| Population | 329064917 | 1433783686 | 126860301 | 1366417754 | 67530172 |
You are required to calculate the GDP Per Capita and comment upon the same.
Solution
Therefore, the calculation of GDP Per Capita is as follows
= 21410230000000/329064917
GDP Per Capita will be –
- GDP Per Capita = 65063.85
Similarly, we can calculate GDP Per Capita for other countries as shown below
It can be observed that the population of India and China is more and hence their GDP per capita is depicting a low figure. Further, the GDP of India is more than the United Kingdom but again due to its oversize population, it’s showing that India is way behind than UK which doesn’t appear when only GDP is compared. The USA is doing well in absolute GDP and per capita as well. Japan is having the advantage of a lower population and hence it’s per capita is good.
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