World’s largest economy, the USA, ranks 10th in GDP per capita PPP; What is India’s position?

By: Team India Tracker

The International Monetary Fund (IMF) has released its latest projections, showcasing the richest nations based on their per capita purchasing power parity (PPP).

According to the International Monetary Fund’s January 2025 report, Global growth is expected to reach 3.3 percent in both 2025 and 2026, remaining below the 2000–2019 historical average of 3.7 percent. The 2025 forecast remains largely unchanged from the October 2024 World Economic Outlook (WEO), with an upward revision for the United States balancing out downward adjustments in other major economies. Meanwhile, global headline inflation is anticipated to decrease to 4.2 percent in 2025 and 3.5 percent in 2026, with advanced economies reaching their targets sooner than emerging markets and developing economies. The International Monetary Fund (IMF) has released its latest projections, showcasing the richest nations based on their per capita purchasing power parity (PPP).

In 2025, Luxembourg maintained its position as the world's wealthiest country, with an impressive GDP per capita of $154.91 thousand, according to the IMF. This status is largely attributed to its central European location, strong financial services industry, and prominence as a top tourist destination. Notably, Singapore climbed two spots to become the second richest nation, surpassing Macau SAR, with a GDP per capita of $153.61 thousand.

Source: International Monetary Fund

In contrast, the United States, despite being the largest global economy in nominal terms, ranks tenth in GDP per capita at approximately $89.68 thousand in 2025. Meanwhile, the United Arab Emirates experienced a significant drop, falling from 6th place in 2024 to 15th this year, with a GDP per capita of $82 thousand.

India, the world's fifth-largest economy, shows a stark difference in GDP per capita, ranking among the bottom 100 nations (124th, as reported by Forbes) with a GDP per capita of $11.94 thousand in 2025.

According to the IMF’s World Economic Outlook Update, January 2025, growth forecasts for advanced economies show mixed revisions. In the United States, strong underlying demand, supported by wealth effects, a less restrictive monetary policy, and favorable financial conditions, keeps the economy resilient. Growth is projected at 2.7 percent in 2025—0.5 percentage points higher than the October forecast—driven by momentum from 2024, a robust labor market, and rising investment. However, growth is expected to return to its potential level in 2026.

In the euro area, economic expansion is set to pick up but at a slower pace than previously anticipated, as geopolitical tensions continue to impact sentiment. A weaker-than-expected end to 2024, particularly in manufacturing, along with increased political and policy uncertainty, has led to a downward revision of 0.2 percentage points to 1.0 percent in 2025. Growth is forecasted to rise to 1.4 percent in 2026, supported by stronger domestic demand, easing financial conditions, and improved confidence.

For other advanced economies, growth forecasts remain relatively stable due to opposing factors. While recovering real incomes are expected to drive consumption, trade challenges—including rising trade policy uncertainty—are likely to restrain investment.

In emerging markets and developing economies, growth in 2025 and 2026 is projected to remain in line with 2024 levels. In China, the 2025 growth forecast has been slightly revised up by 0.1 percentage point to 4.6 percent, reflecting spillover effects from 2024 and the fiscal package announced in November, which helps counterbalance the negative impact of trade policy uncertainty and the struggling property market. Growth is expected to remain steady at 4.5 percent in 2026 as trade policy uncertainties ease and an increase in the retirement age slows the decline in the labor force.

India’s growth is projected to remain strong at 6.5 percent in both 2025 and 2026, consistent with the October forecast and aligned with the country’s potential growth trajectory. According to India’s National Statistics Office, the GDP growth rate for the first quarter of FY 2024-25 stood at 6.7 percent, but it unexpectedly declined to 5.4 percent in the second quarter. This sharp drop has sparked discussions on whether the slowdown is a temporary fluctuation or a more systemic issue. As a result, anticipation around the third-quarter GDP figures has grown, as they may provide a clearer economic outlook.

In the previous financial year (FY 2023-24), the provisional annual GDP growth rate was 8.2 percent. However, the National Statistical Office (NSO) projected a 6.4 percent growth rate for FY 2024-25 in its January estimates, marking a four-year low. Given the disappointing second-quarter performance, a further decline in third-quarter growth could put the 6.4 percent annual target at risk.

The risk of renewed inflationary pressures may lead central banks to increase policy rates, further widening monetary policy differences. Prolonged high interest rates could exacerbate fiscal, financial, and external vulnerabilities. A stronger US dollar—driven by interest rate differentials, tariffs, and other factors—could disrupt capital flows, worsen global imbalances, and complicate macroeconomic policy trade-offs.

Beyond economic policy risks, escalating geopolitical tensions could trigger fresh surges in commodity prices. Intensifying conflicts in the Middle East and Ukraine may directly impact trade routes and drive up food and energy costs. Commodity-importing nations could be particularly vulnerable, facing both rising inflation from higher commodity prices and additional pressure from a strengthening dollar, heightening the risk of stagflation. Stagflation is a situation in which the economy experiences sluggish or stagnant growth, elevated unemployment, and persistent inflation at the same time. This occurrence is uncommon, as inflation generally increases during periods of economic expansion and decreases when growth slows.