Global Gross Domestic Product and Human Development Index, 2015

Global Gross Domestic Product and Human Development Index 2015

Source: UNEP (2012): The UNEP Environmental Data Explorer, as compiled from World Development Indicators (WDI-The World Bank). United Nations Environment Programme.

The Gross Domestic Product (GDP) is the total output of goods and services for final use produced by an economy by both residents and non-residents. It is equal to consumption plus gross capital formation plus exports, fewer imports, and includes subsistence products produced by households for their own use, valued at current local prices for comparable commodities. The GDP is often divided by the population to express the standard of living since it is a rough approximation of the amount of wealth per person (there are issues of wealth distribution that are not well reflected in GDP per capita figures).

The World Bank often uses GDP per capita to classify the level of economic development of nations. The wealthiest nations account for the largest markets in the world. The GDP is thus a reasonable approximation of the size of a market, but not necessarily of the standards of living (or quality of life). For instance, China has a much higher GDP than Korea, implying that China is a bigger market, but Korea is a more sophisticated economy with higher standards of living.

The Human Development Index (HDI) is a composite measure ranging from 0 to 1 that includes life expectancy, education (literacy rate), and standards of living (GDP per capita). It is more representative of the commercial potential of countries with an HDI above 0.8, accounting for the world’s leading markets. This commercial potential and dynamism shape global transactions and flows.