The Economist magazine has published its annual ranking on the world’s richest countries, based on three measures – gross domestic product (GDP) per person at market exchange rates, incomes adjusted for local costs, otherwise known as purchasing-power parity, and hours worked.
Some familiar names top the rankings: Switzerland, Singapore and Norway. In dollar terms, Switzerland comes top, with average earnings above $100,000 (€86,000) last year while Singapore and Norway follow, at $90,700 and $86,800, respectively.
Adjusted for local costs, Singapore jumps ahead. Adjusted for hours worked, Norway takes first place, as it did last year, followed by Qatar and Denmark, the publisher said.
The United States, the world’s biggest economy by GDP, ranks fourth , seventh and sixth on the three measures. That is unlikely to please US president Donald Trump, or it could prove his point that America is being “screwed” by the rest of the world. The UK is placed 19th, 27th and 25th.
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And the Republic of Ireland? We’re constantly being told that the State is one of the richest in the world but we don’t make the cut among The Economist’s list of 178 countries.
According to the publisher, our GDP calculations are “polluted by tax arbitrage”. That rules Ireland out of consideration as this is a ranking of countries which are “truly rich”, according to The Economist.
US economist Paul Krugman described our GDP numbers as “leprechaun economics” some years ago. We can’t grumble too much given that the Central Statistics Office produces an alternative indicator called modified GNI (which strips out some of the effects of multinational activity here, including depreciation on leased aircraft) to measure activity in the domestic economy.
Tiny territories such as Bermuda were considered “too small to rank” while Luxembourg was excluded as “incomes are inflated by cross-border commuters”.
Spare a thought for Burundi, which finished bottom of the list and where most of the population is under 17 years old. Even adjusted for prices, The Economist noted that one Swiss income would be shared between 100 Burundians. That might not be the case for much longer following Trump’s recent imposition of a punitive 39 per cent tariff on the Swiss.
Cantillon, named after Irishman Richard Cantillon who was known as the “Father of Political Economy”, is a column in which Irish Times business journalists offer analysis and comment on business and economic issues of the day.
