GDP per capita in the future

by Rick on October 31, 2010

I recently stumbled upon the list of countries by future GDP per capita. For an economics wonky nerd like me, it’s quite exciting. The IMF supplies the data and Wikipedia allows you to rank countries by lowest to highest GDP per capita and by year as well.

What’s the point of all this? Well in five years not much will happen to most countries except small incremental growth. Some countries will probably collapse during that time due to war, a market crash or some sort of disaster. But for most countries, it will mean gradual growth.

I think lists like this need to be taken with a grain of salt. For one, any prediction five years into the future is bound to be far less accurate than one made in just one year. Another issue: GDP per capita means what every citizen of a country would receive if the entire economy were evenly divided. Obviously every country has wealth disparity, and many people will receive far less than their country’s GDP per capita, and a lucky few will receive far more.

For instance, by 2015, the IMF predicts Russia’s per capita GDP will be US$21,336. That’s exceptional and will make the country borderline first world status. Is that accurate? Russia is by many standards a corrupt country with horrible wealth disparity. I doubt many Russians will have salaries greater than that figure.  But considering that Russia’s GDP per capita is around US$15,000, it means that the country is expected to undergo considerable economic growth over the next five years.

What does it mean for expats?

I would advise expats to look at this page and its cousin that lists countries by future GDP, and use this as a way to determine where it is best to find work. A country that is expected to grow spectacularly over the next five years is probably going to be a place with a lot of opportunities for work. A country that is expected to have slower growth will not be a good place to find work. And a country with a very low GDP per capita is probably not a good place to get a high salary, unless you work for an NGO that specializes in international development.

Even though this data comes from the International Monetary Fund, perhaps the pre-eminent source of current economic data in the world, it is bound to be inaccurate at times. It’s simply too difficult to predict the future, particularly futures that are several years off. It might be wiser to look instead at the IMF’s predictions only one or two years into the future for more accurate predictions.

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