Advanced economies' growth rankings shift on per capita measure

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Advanced economies' per capita growth

Highlights

IMF data shows Korea leads advanced economies in per capita GDP growth from 2019-2026, followed by Greece, with the U.S. third.
Australia and Canada exhibit strong overall GDP growth driven by population increases, but drop significantly in per capita rankings, highlighting divergent demographic trends.
The U.S. GDP at purchasing power parity grows from twice Japan's in the 1990s to over four times today, with projections nearing fivefold by 2031.

IMF-based comparison changes the league table

As reported by Financial Times, the analysis extends a previous comparison by using the latest IMF update to its global economic database and broadening the period to 2019-2026, with a focus on how demographic shifts alter cross-country growth rankings.

On headline GDP, the U.S. leads a group of 17 advanced economies, supported by strong recent expansion, AI-related investment and productivity gains. But the ranking changes when population growth is taken into account, with Korea emerging as the best-performing advanced economy since 2019 on a per capita basis, followed by Greece, while the U.S. slips to third.

The divergence reflects sharply different demographic paths. Canada and Australia, and to a lesser extent the UK, record unusually strong population growth after the pandemic, largely driven by immigration, while Japan, Italy, Korea and Greece continue to see populations shrink.

This gap matters because fast population growth can lift total output even when gains in living standards are weaker. Australia, for example, ranks third in the advanced-economy group for overall GDP growth between 2019 and 2026, but falls to 12th when measured by GDP per capita, with Canada showing a similar pattern.

Demographic pressure raises productivity challenge

Headline GDP still matters for market size, tax capacity, geopolitical weight and the ability to finance public spending. The article notes that the U.S. economy has grown from just over twice the size of Japan's in the 1990s, measured at purchasing power parity, to more than four times larger today, with the gap projected by IMF figures to approach fivefold by 2031.

Even so, ageing also affects GDP per capita, since a shrinking working-age population can weigh on output per person while healthcare, social care and pension costs put greater pressure on public finances. Moody's analyst Madhavi Bokil says falling fertility means countries will need to rely more heavily on productivity to sustain growth and credit strength.

The comparison also highlights differences within Europe and among emerging markets. Italy ranks fifth in per capita terms despite weak headline growth, while Germany remains at the bottom of both tables because of factors including the loss of cheap Russian energy, stronger Chinese competition, chronic under-investment and slow digitalisation.

For emerging economies, India's economy expands faster than China's over the seven-year period, but the gap narrows considerably after adjusting for population trends. Over the coming decades, more countries are set to face stagnant or shrinking working-age populations, making it harder to sustain growth by adding workers and increasing the pressure on governments to raise participation and productivity.

Our earlier article on the IMF’s updated outlook for sub-Saharan Africa explained that the Fund raised its 2026 growth forecast while also warning that the inflation path is worsening. We highlighted how tighter global financing conditions, rising debt-service burdens, and climate risks such as El Niño could force a firmer policy stance and strain already fragile fiscal and external buffers.

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