Taiwan was ranked the 20th richest country in the world in terms of per capita income when adjusted for purchasing power parity (PPP), much higher than it would be ranked if comparing nominal per capita GDP, according to data released by the IMF on Tuesday.
Based on the latest IMF statistics, Taiwan’s PPP-based per capita GDP was estimated at US$35,604 last year. The nation’s ranking was higher than the UK, France, Japan and South Korea, the data showed.
Purchasing power parity is used to adjust exchange rates so that the rates accurately reflect each currency’s purchasing power.
The Persian Gulf oil-producing country of Qatar replaced Luxembourg as the world’s richest country with a PPP-based per capita GDP of US$81,466 last year. Qatar’s figure was almost double that of the US, which ranked seventh at US$46,860.
The report said GDP dollar estimates used in its ranking were derived from PPP calculations prepared by various organizations, including the World Bank. It also qualified the statistics, saying PPP figures were estimates rather than hard facts.
Comparisons of national wealth are also frequently made on the basis of nominal GDP, which does not reflect differences in the cost of living in different countries.
Consequently, the IMF and the World Bank tend to use the PPP index to compare national wealth or living standards of various countries.
In using PPP per-capita GDP to compare Taiwan and Japan, Taiwan’s per capita income is actually higher by US$1,749. However, Taiwan’s nominal GDP per capita is less than half Japan’s US$42,782. The huge difference can be attributed to the high cost of living in Japan or the overvaluation of the yen, or a combination of both.
The IMF data showed Germany was ranked one notch ahead of Taiwan, with US$36,081 in per capita GDP on a PPP basis, while the UK ranked 21st richest with an estimated US$35,059 and France was 23rd at US$33,910.
Japan came in 24th at US$33,885 and South Korea was two spots behind with PPP-based per capita GDP estimated at US$29,997. China was ranked 94th at US$7,544.