What is Real GDP?
In this article we will discuss how to calculate real GDP Per Capita, but before that lets define it. Real gross domestic product (GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year. While per capita is a Latin term that translates to ‘by head.’
Real GDP Per Capita Formula refers to calculating the country’s total economic output with respect to per person after adjusting the effect of the inflation.
Uses
It is widely used worldwide to compare the standard of living across countries over some time. The higher the figure, the better it is.
To gauge an economy’s growth rate free from the distortions of inflation, economists track real gross domestic product
Formula to Calculate Real GDP Per Capita.
Nominal GDP is an assessment of economic production in an economy but includes the current prices of goods and services in its calculation.
GDP deflator or the implicit price deflator, measures the changes in prices for all of the goods and services produced in an economy.
Example:
Country X has a nominal GDP of $450 Million and the deflator rate is 20%. The population of the country X is 80 million.
Thus, the real GDP per capita is 468.75.
Countries with the Highest Per Capita GDP as of 2023.
| Country | GDP by head (USD) |
| Luxembourg | 128.82 |
| Ireland | 107 |
| Switzerland | 94.83 |
| Qatar | 89.42 |
| Norway | 88.75 |
| Singapore | 84.5 |
| United States | 78.42 |
| Iceland | 77.96 |
| Australia | 68.02 |
| Denmark | 66.39 |
