Yahoo Finance The Most Prosperous Nation in the World
In this article, we will be finding out the most prosperous nations in the world. Based on weighted averages of GDP per Capita and Gini coefficient, we’ve prepared a list of 40 Most Prosperous Nations in the World.
Global poverty saw a major increase due to the COVID-19 pandemic as extreme poverty (living on less than $2.15 per day) rose from 8.9% in 2019 to 9.7% in 2020. This was the first global increase in decades. South Asia witnessed the highest rise, with extreme poverty jumping by 2.4 percentage points to 13%. However, regions like Latin America and the Caribbean, bolstered by Brazil’s fiscal policies, saw a decline in extreme poverty despite the pandemic’s economic disruptions.
By 2022, many regions, including East Asia, Latin America, and Europe, had reduced their extreme poverty rates below pre-pandemic levels. Despite this, global poverty remained marginally above 2019 levels. The uneven recovery is evident in Sub-Saharan Africa, where over half of the world's extremely poor reside, and poverty reduction was slower due to limited survey coverage and the compounded impact of inflation driven by geopolitical events like Russia’s invasion of Ukraine.
In 2024, the state of global prosperity is definitely improving, as there has been significant growth in the number of people living in better conditions (relatively). In June 2023, the World Bank established a new threshold for prosperity at $25 a day, or $9,125 annually. Currently, around 2.4 billion people, nearly a third of the global population, live at or above this level. This figure is increasing rapidly as approximately 85 million people cross this threshold annually. However, considering global population growth, the net increase in prosperous individuals is around 15 million annually.
Moreover, since 2021, more people in emerging economies have achieved prosperity compared to those in the OECD countries, although only 20% of the population in these regions meets the prosperity threshold compared to 82% in OECD countries. By 2033, the spending power of the prosperous in emerging economies is expected to surpass that of the OECD.
It is also interesting to note that those earning $25 a day spend about $13.50 on essentials like food, housing, and clothing, leaving $11.50 for discretionary spending on goods and services that enhance quality of life. This contrasts sharply with the spending habits of those below the prosperity line, who allocate the majority of their income to basic necessities.
Another concern regarding economic prosperity is the vulnerability of women to the issue. Currently, one in every ten women worldwide lives in extreme poverty. Conflict exacerbates these conditions, as seen by the doubling of women and girls in conflict-affected areas since 2017, now numbering over 614 million. In these regions, women are 7.7 times more likely to live in extreme poverty compared to men. Climate change further deepens economic inequalities for women. By 2030, it is projected that 236 million more women and girls will face hunger, compared to 131 million men.
Nevertheless, some tech giants like Microsoft Corp (NASDAQ:MSFT) and Apple, Inc (NASDAQ:AAPL) have been active in ensuring economic prosperity for nations around the world.
For example, Microsoft Corp (NASDAQ:MSFT) has made a major contribution to economic prosperity through its recent $1 billion digital ecosystem initiative in Kenya, in collaboration with G42. This investment is the largest private-sector digital investment in Kenya’s history and aims to boost economic development across East Africa by establishing a state-of-the-art green data center and creating a new East Africa Cloud Region. Additionally, the initiative includes local-language AI development, digital skills training, and improved connectivity to enhance Kenya's technological landscape and workforce capabilities.
Speaking of initiatives, Microsoft Corp (NASDAQ:MSFT) is also investing $2.9 billion over the next two years to enhance Japan's AI and cloud infrastructure. The investment will include AI training for 3 million people, opening Japan’s first Microsoft Corp (NASDAQ:MSFT) Research Asia lab in Tokyo, and strengthening cybersecurity collaboration with Japan’s government.
On the other hand, Apple, Inc (NASDAQ:AAPL) has recently opened its first Developer Center in Southeast Asia, located in Singapore which is no less than a milestone for the region’s tech industry and its prosperity. This state-of-the-art facility offers unparalleled access to Apple, Inc (NASDAQ:AAPL) experts and resources that will benefit hundreds of thousands of developers behind more than 90,000 apps on the App Store.
This Developer Center will certainly drive economic prosperity in Asia by fostering innovation and enhancing the skill sets of local developers. The centre provides a range of activities, such as sessions, labs, and workshops designed for teams at all stages of app development. With access to over 250,000 APIs and more than 40 software development kits (SDKs), developers can integrate advanced technologies like machine learning and augmented reality into their apps. This focus on upskilling will not only advance individual careers but also attract international companies to the region.
Is Norway the Most Prosperous Nation in the World?
In order to identify the most prosperous nation in the world, we used two primary metrics: GDP per capita by country (as of 2022) and the Gini Coefficient Index. Data for both metrics was sourced from the World Bank. Each metric was ranked from 1 to 200, with 1 being the highest rank.
We assigned weights to the ranks of each metric: GDP per capita was given a weight of 0.8, and the Gini Coefficient was given a weight of 0.2. We then calculated a weighted average of the ranks for each country. Based on these weighted averages, we determined the overall ranks of the countries.
The idea behind our methodology is that GDP per Capita explains the average economic output and standard of living which can provide a clear measure of national wealth of any country. On the other hand, the Gini Coefficient Index assesses income inequality which helps determine how evenly this wealth is distributed among the population. Together, these metrics provide a holistic view of prosperity. Our methodology revealed that Norway is indeed the most prosperous nation in the world with an weighted average rank of 4.8.
It is also worth highlighting that In Norway, the mainland GDP is projected to grow by 1.0% in 2024 and 1.7% in 2025. Unemployment is expected to stabilize around 2%, while annual wage growth for 2024 is estimated at 5.2%. Although inflation will decrease, it will remain above the 2% target, averaging 4.0% in 2024 and 3.5% in 2025. The policy rate is likely to stay at 4.5% through 2024, with potential cuts expected in 2025. Increased household purchasing power and higher housing prices will support economic growth despite ongoing challenges with the NOK.
Norway has a high GDP per capita of $121,259 as of 2022 and has a low Gini coefficient of 0.277, making it the most prosperous country in the world.
To check out other prosperous nations in the world, please visit the 40 Most Prosperous Nations in the World and read our full report.
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Disclosure: None. 40 Most Prosperous Nation in the World is originally published on Insider Monkey.
