The World’s Richest Countries

Have you ever wondered how the lists of the wealthiest countries are made? As a rule, most researchers have used the Gross Domestic Product (GDP). However, according to New World Health, the traditional method being used for years may not be accurate, because a high GDP doesn’t necessarily amount to high wealth.

So New World Health carries out some studies, considering the international wealth sector and says that there are many more other factors that raise high wealth such as: “Strong ownership rights; a well-developed banking system and stock market; free and independent media (free transfer of information to investors); low level of government intervention; low-income tax and company tax rates; and ease of investment.”

In one of its papers, the firm offers to estimate the richest countries on the planet not traditionally but using total individual wealth. Whilst the latter is defined as the complex of the private wealth of all individuals in each nation. And by the wealth, they mean property, cash and different kinds of shares.

Here’s the ranking of the wealthiest countries by total individual wealth, according to New World Health, 2015.

1) United States – $48,734 billion.

2) China – $17,254 billion.

3) Japan – $15,230 billion.

Now, let’s take a look at the table that Global Finance published recently. They used GDP-PPP as it suits better for comparing living standards in different countries because PPP takes into consideration not only exchange rates but the cost of living and rates of inflation.

*Data collected from International Monetary Fund, World Economic Outlook Database, November 2018 

Still, there are some countries that make their way to the wealthiest 20 nations list, like India and Indonesia. And the natural reaction is – “How?” The answer is, however, simple – it’s due to the fact they have large populations. Although, “On a per capita basis, they are quite poor” and lots of people are still living below the poverty line.

So, in reference to the New World Wealth’s study “no one has ever ranked the richest countries in the world by private wealth held”, but they did. And it’s showing us outstanding results. For example, Australia has risen in ranking and now is considered to be one of the wealthiest countries in the world. Meanwhile, Indonesia and China showed great results in terms of growth, even though they started from a low base.