GDP per capita is often considered an indicator of the standard of living of a given country, as it reflects the average wealth of each person residing in a country. It is therefore the standard method used to compare how poor or wealthy countries are in relation to each other. With 2018 just under way, we decided to take a look at our forecasts for GDP per capita from 2018 to 2022 for the 127 countries we cover to get an idea of what countries are the poorest currently and which will be making a leap toward becoming wealthier in the coming years. The projections used in this study are Consensus Forecasts based on the individual forecasts of over 900 world renowned investment banks, economic think tanks and professional economic forecasting firms.
As one might imagine those closest to the top of the list are mostly emerging markets and least developed countries of which the majority are from Sub-Saharan Africa. Similar to our ranking for the most miserable economies, this is one of those lists where the “winners” aren’t really winners; being as far from the top of the list as possible is a good thing.
Many of the poorest nations in the world are places where issues such as authoritarian regimes, political turmoil, weak financial institutions, inadequate infrastructure and corruption deter foreign investment despite the fact that many of them are immensely rich in natural resources and have a young, growing population. In our list of the top 10, five are landlocked, which means they have no direct access to maritime trade and another one is in the midst of a civil war, which helps to explain why some of them are currently not in the best of shape.
Despite how grim that may sound, these countries stand to benefit the most in the coming years as emerging markets will become vitally important to the global economy. Although per capita GDP will still be the highest in the developed world by 2022, the fastest growth in GDP per capita will indeed come from many of the world’s poorest economies currently. According to our forecasts, the highest per capita growth from 2016–2022 will be in Yemen with a 97% increase in that time span, followed by Moldova, India, Romania and Myanmar with 83%, 77%, 73%, and 73% growth in per capita GDP, respectively. The winner for GDP per capita growth from 2016, the latest confirmed data, and our forecast for 2018 is Moldova with a projected 36% increase in per capita growth, or in USD terms, USD 691 per head.
With that said, let’s have a look at the poorest countries in the world according to the FocusEconomics Consensus Forecast for 2018 nominal GDP per capita.
1. Democratic Republic of Congo
2016 GDP per Capita: USD 441
2018 GDP per Capita (projected): USD 468
2022 GDP per Capita (projected): USD 632
Although the DRC has abundant natural resources, unfortunately with a projected 2018 GDP per capita of USD 468, the country is in the unenviably position of being the poorest country in the world. There has been severe political unrest in recent years, as calls for President Joseph Kabila, who took power after the assassination of his father in 2001, have reached a fever pitch. Kabila was reelected in 2011 in a controversial election and has since postponed elections several times with the latest date set for December 2018.
Parliament approved a highly controversial mining code on 24 January, which had been under discussion for years. The bill, which has yet to be signed by President Kabila, envisages increasing royalties from mineral products including copper and cobalt. It has sparked fears that business profit margins could be eroded, stifling investment in the sector. This would likely dent the country’s ongoing economic recovery from the 2016 slump, which has been propelled by higher commodity prices since the second half of 2017. Major players, including the United States and France, have recently stepped up pressure on the president to leave office and refrain from running in the delayed presidential elections to avoid an escalation in political tensions.
Higher prices for commodities should propel economic growth in the DRC, although it will remain constrained by uncertainty around the mining code and the upcoming presidential elections. FocusEconomics panelists forecast growth of 3.0% in 2018 and for 2019, growth is seen reaching 3.4%.
2016 GDP per Capita: USD 383
2018 GDP per Capita (projected): USD 486
2022 GDP per Capita (projected): USD 579
The second poorest country in the world is Mozambique with a forecasted GDP per capita of USD 486 for 2018. The former Portuguese colony has high hopes of transforming its economy based on prospects of abundant natural gas fields discovered in 2011. The country recently took an important step toward said transformation with the approval of a USD 20 billion Anadarko liquified natural gas plant on 7 February, which envisages exploiting the country’s vast deposits of natural gas.
Economic growth is expected to accelerate this year on the back of higher prices for natural gas. FocusEconomics panelists see growth of 4.5% in 2018 and 4.7% in 2019.
2016 GDP per Capita: USD 694
2018 GDP per Capita (projected): USD 738
2022 GDP per Capita (projected): USD 898
Uganda finds itself in third place on the list with a 2018 projected GDP per capita of USD 738. Although this represents a large leap from the level of the first two on the list, Uganda is a bit of a strange case. Following the 1986 armed conflict, the ruling political party National Resistance Movement (NRM), enacted a series of structural reforms and investments that led to a period of significant economic growth and poverty reduction all the way up to 2010. In the last five years or so, economic growth has slowed and consequently so has the pace of poverty reduction. There are a variety of factors that have brought on the slowdown, however, it has been attributed mostly to adverse weather, private sector credit constraints, the poor execution of public sector projects and unrest in their neighbor South Sudan, which has flooded the country with refugees fleeing the country and subdued exports. According to the World Bank, if Foreign Direct Investment accelerates, the banking system stabilizes, and budgeted, capital spending is executed without delays, the economy may start to pick up once again, helping to reduce poverty.
Luckily for Uganda, it appears the FDI is indeed improving as it expanded by double digits in 2017, which bodes well for the economy and poverty reduction in the near future. The downside risk to the outlook is the weakness in the financial system, particularly the low level of credit in the private sector and the high cost of small loans. FocusEconomics panelists see growth of 5.4% in 2018 and 5.8% in 2019.
2016 GDP per Capita: USD 806
2018 GDP per Capita (projected): USD 836
2022 GDP per Capita (projected): USD 1086
Tajikistan is number four on the list of poorest countries with a projected 2018 GDP per capita of USD 836. Tajikistan gained independence after the fall of the Soviet Union, however, a civil war broke out shortly after, which lasted five years until 1997. Since then, political stability and foreign aid have allowed the country’s economy to grow, reducing poverty rather remarkably. According the World Bank, poverty fell from over 83% to 47% between 2000 and 2009 and fell further from 37% to 30% between 2012 and 2016. Since then, poverty reduction, has regrettably stagnated, however, it is projected to fall from 30% to 25% by 2019 as growth picks up.
The economy, which is highly reliant on remittances, is expected to grow strongly in 2018 as it did last year due to a robust industrial sector, solid investment, and healthy private consumption supported by remittances and higher wages amid a tighter labor market. Growth is, however, likely to moderate from 2017 as fiscal consolidation efforts curtail private-sector credit. Risks to the outlook continue to stem from the banking sector’s high level of non-performing loans. FocusEconomics Consensus Forecast panelists expect GDP to expand 5.1% in 2018 and 5.2% in 2019.
2016 GDP per Capita: USD 705
2018 GDP per Capita (projected): USD 874
2022 GDP per Capita (projected): USD 1154
Haiti is number five on the list with an expected GDP per capita of USD 874. Haiti is extremely vulnerable to extreme weather and natural disasters with 90% of the country’s population at risk according to the World Bank. These natural disastersh batter the country in more ways than one, including the economy. The 2010 earthquake for example did damage equivalent to 32% of the country’s GDP.
Although there is some positive sentiment over Haiti’s political situation, as new president Jovenel Moïse took office in February of last year and the new parliament and cabinet were ratified later in the year, which should allow the country to accelerate reforms and move public programs forward to create a more sustainable development for all Haitians, the country remains the poorest in the Americas. More than 6 million out of 10.4 million Haitians live under the national poverty line of USD 2.41 per day and over 2.5 million live under the national extreme poverty line of USD 1.23 per day according to the latest household survey (ECVMAS 2012). As far as income equality goes, it is also one of the most unequal, with a Gini coefficient of 0.59 as of 2012.
While the economy started 2017 on a solid footing, economic activity decelerated in the second half of the year, mostly due to the negative impact of Hurricanes Harvey and Irma. Although the recovery is expected to strengthen in the coming years, the U.S. administration’s recent decision to scrap Temporary Protected Status (TPS) for Haitians as of July 2019 threatens all-important remittance inflows, which account for around 34% of the country’s GDP. As a result of this decision, around 60,000 Haitians currently living in the U.S. could be forced to return to Haiti.
Economic growth is expected to gather steam this year on the back of higher government spending on reconstruction and healthy global growth. That said, high poverty levels and the sustained possibility of seasonal hurricanes remain key downside risks to the economic outlook. FocusEconomics panelists foresee growth of 2.5% in 2018 and 2.7% in 2019.
2016 GDP per Capita: USD 884
2018 GDP per Capita (projected): USD 938
2022 GDP per Capita (projected): USD 1253
Back to Africa now with number six on the list, Ethiopia is located in the Horn of Africa, which gives it a great strategic jumping off point, as it is close to the Middle East and its markets. Although it is technically landlocked, it’s tiny bordering neighbor, Djibouti acts as its main port. Ethiopia has grown rapidly since the turn of the century, and is currently the fastest growing country in Africa, although extremely poor as evidenced by its projected 2018 GDP per capita of just USD 938.
Along with Ethiopia’s rapid economic growth came significant reductions in poverty with over 55% of Ethiopians living in extreme poverty in 2000 dropping to 33.5% in 2011, according to the World Bank. To sustain its economic growth and poverty reduction, good governance is needed, however, significant public unrest has taken hold in Ethiopia of late over the country’s authoritarian regime.
In a bid to cool mass unrest and open the way for economic reforms, Prime Minister Hailemariam Desalegn submitted his resignation on 15 February. However, the following day the authoritarian government declared a six-month state of emergency, a move designed to extend the governing coalition’s grip on power. During the state of emergency, protests will be banned and Hailemariam Desalegn will remain prime minister until his successor is elected by the parliament. This comes following the release of thousands of political prisoners since January, in a failed attempt to reduce political and ethnic tensions. Although GDP grew over 10% in FY 2016—which runs from July 2016 to July 2017—the economy’s external imbalances and dropping reserve levels pose sizeable risks to growth.
2016 GDP per Capita: USD 762
2018 GDP per Capita (projected): USD 998
2022 GDP per Capita (projected): USD 1502
Yemen is in the midst of massive civil war that has caused a catastrophic humanitarian crisis, which goes a long way to explaining the country’s place on this list of the poorest countries in the world. Yemen is forecast to have a GDP per capita of USD 998 in 2018. Basic services across the country are on the verge of collapse, as half of the population is currently living in areas directly affected by the conflict and 2.8 million Yemenis have been forcibly displaced.
A new front has opened in the civil war in recent weeks, after fierce fighting broke out in Aden between the Saudi-backed government and southern separatists—erstwhile allies against the Houthi rebels—impeding humanitarian operations in the city. The conflict was triggered by the government’s refusal to meet the separatists’ demand of a cabinet reshuffle. More positively, Saudi Arabia has in recent weeks pumped cash into the war-torn country, providing USD 2 billion to the Central Bank to support the currency and announcing a further USD 1.5 billion in aid. However, Saudi Arabia maintains a partial blockade of commercial imports, with fuel in particular struggling to enter the country. Over half the population remains food insecure, and the number of suspected cholera cases stands at over 1 million.
The economy should expand this year thanks to international support, although this is subject to a favorable evolution of the civil war. FocusEconomics panelists expect the economy to grow 2.2% in 2018 and 7.8% in 2019.
2016 GDP per Capita: USD 2145
2018 GDP per Capita (projected): USD 1026
2022 GDP per Capita (projected): USD 1646
Uzbekistan is eighth on the list of poorest countries according to 2018 GDP per capita, which is forecast to come in at USD 1026. The country’s economic growth was fast between 2004 and 2016, lifting significant portions of the country out of poverty. A country rich in commodities, Uzbekistan was aided by high commodities prices and increased exports of gas, gold and copper, which generated state revenues that financed large increases in investment and wages that bolstered private consumption.
Unfortunately, in the period between 2013 and 2016, commodities prices came crashing down along with the weak performance of Russia and China, key trade partners, adversely affected the economy. Despite the external environment weakening, the government’s countercyclical fiscal and monetary policies allowed growth to slow only slightly, however, poverty reduction has largely stagnated.
In February of 2017, the government began implementing its Strategy of Actions for the Development of Uzbekistan for 2017-2021, which among other things included measures to liberalize its economy. One measure was implemented in September of 2017, which linked the official exchange rate with the curb market rate and established a framework to allow it to flow.
Unfortunately, the economy moderated sharply in 2017 to 5.3% from 2016’s 7.8%, the slowest print since 2003. The moderation partly reflected the impact of the currency devaluation, which had caused inflation to spike and real disposable income to drop. It also underscored the short-lived impact that many market-friendly reforms pushed ahead by the government to attract foreign investment are having on the economy.
The economy is expected to accelerate this year from 2017’s muted growth rate as prices for commodities trend higher. The implementation of market-friendly reforms, however, will constrain growth in the near term. FocusEconomics panelists expect GDP to grow 6.2% in 2018 and 6.1% in 2019.
2016 GDP per Capita: USD 976
2018 GDP per Capita (projected): USD 1112
2022 GDP per Capita (projected): USD 1362
Number nine on the list of poorest economies is Tanzania with an expected USD 1112 GDP per capita for 2018. Tanzania’s economy has been very consistent over the last decade averaging between 6 and 7% growth every year. According to the World Bank, the poverty rate has also steadily declined, however, the absolute number of people living in poverty has not due to the high growth rate of its population over that time.
Economic prospects for Tanzania depend on infrastructure investment, improving the business environment, increasing agricultural productivity, amongst others and growth prospects for this year remain strong. Favorable weather conditions should underpin the agricultural sector, while a ramp-up in infrastructure spending is expected to support investment. However, downside risks stem from the uncertain legal framework for mineral exports associated with President Magufuli’s shake-up of the sector and weakness in the banking system. FocusEconomics Consensus Forecast panelists expect GDP to expand 6.4% in 2018 and 6.5% in 2019.
2016 GDP per Capita: USD 1081
2018 GDP per Capita (projected): USD 1222
2022 GDP per Capita (projected): USD 1446
Last on the list is Kyrgyzstan, the an expected 2018 GDP per capita of USD 1222. A landlocked, largely mountainous country with just over 6 million, the Kyrgyz Republic recently adopted a parliamentary system in 2011. Having experienced considerable political and social instability with weak governance and high corruption since gaining independence in 1991, the country’s current democracy is a far cry from those days. Nonetheless corruption is still pervasive in the public sector, which contrain the country’s economic growth potential.
The Kyrgyz economy is also vulnerable to external shocks due to its overreliance on its massive gold mine, Kumtor, which accounts for about 10% of GDP, as well as remittances, which amount to about 30% of GDP.
Recently released government data revealed that the economy grew at a robust rate of 4.5% in 2017, picking up pace from the previous three years. According to the data, it was primarily driven by a strong manufacturing sector and solid fixed investment growth. Led by the thriving mining sector, the manufacturing sector picked up pace from 2016, growing at a solid pace in 2018. The mining sector was buoyed by robust output at the Kumtor gold mine. Fixed investment, primarily in infrastructure, is likely to continue its strong performance in 2018, as China eyes investments in Central Asia as part of its One Belt One Road Initiative.
You can see the entire list below of our projections for GDP per capita for 2018 below. If you’d like to get more historical data, Consensus Forecasts, charts, graphs and written analysis from our team of economists, download a free sample report by clicking on the button below the table.Connect with us on Social media