20+ Differences Between GDP And GDP Per Capita (Explained)

GDP and GDP Per Capita are two significant macroeconomic metrics. Both of the concepts are necessary for painting the picture of a country’s economic growth.

For anyone who wants to study macroeconomics or understand the nation’s economy better, mastering the concepts of GDP and GDP Per Capita is of great significance. But before going into the depths of these measures, familiarize yourself with their differences.

Comparison Between GDP And GDP Per Capita

Parameters GDPGDP Per Capita
DefinitionGDP is the estimation of the market value of the commodities and services produced in a country at a definite time.GDP Per Capita is a nation’s GDP or total output per citizen.
CalculationThe methods of calculation are the income and expenditure approach.When GDP is divided by population, GDP Per Capita is obtained.
Significance It is a significant indicator of a nation’s economic growth.It is a significant indicator of the well-being of a nation’s population.

Understanding GDP And GDP Per Capita

What Is GDP?

A crucial indicator of a country’s economic performance, GDP encompasses all the endmost commodities and services a country has yielded within a definite period. It measures their total value in monetary terms. 

Broadly, there are three procedures to evaluate GDP. These include the expenditure approach and the income approach. Generally, GDP is calculated once every year. However, sometimes, it is also estimated once every quarter.

What Is GDP Per Capita?

GDP Per Capita is a macroeconomic metric that economists use in addition to GDP. GDP Per Capita gives the output produced in a country for each citizen.

This measure is an excellent way of getting an idea about a nation’s living conditions and quality of life.

Gdp Vs Gdp Per Capita

Key Differences between GDP and GDP Per Capita


  • GDP- By including all the final goods and services produced in a nation during a particular span of time, GDP gives the measure of their market value. 

    Here the mention of ‘final’ goods and services becomes important because GDP does not include the goods produced midway. Only the goods and services ready for consumption are included while calculating GDP.
  • GDP Per Capita- This fundamental measure divides the value of a nation’s total production among its population. In this way, it deduces the output available for each citizen.


  • GDP- Two approaches are used to estimate the GDP of a nation. These are; the income approach and expenditure approach. 

    Under the income approach, the incomes obtained by all the factors involved in the production are added. Basically, these include wages, interests, profits, and rents.

    The expenditure approach evaluates GDP by computing the summation of four components. These are expenditure by households, domestic investment by private entities, government spending, and net exports.
  • GDP Per Capita- It is possible to compute GDP Per Capita only after GDP has been estimated. The reason is that the division of GDP by population yields GDP Per Capita.
Methods Of Calculation Of Gdp And Gdp Per Capita


  • GDP- Despite the numerous criticisms of GDP. It is still considered a valuable indicator of how a nation’s economy is performing. 

    Real GDP refers to the GDP that has been altered in such a way that the effects of inflation are eradicated.

    It is an essential tool in the hands of economists and policymakers. They use it to find out and analyze whether an economy is growing or diminishing.
  • GDP Per Capita- When the output for each living in the nation is determined, it highlights how the wealth of a nation is divided among the population. By showing this, GDP Per Capita becomes a vital signifier of the welfare and prosperity of citizens.

Frequently Asked Questions (FAQs)

1. Why is increasing GDP good for the economy?

Generally, when GDP goes up, it points towards a growth in the economic activity of a nation. It might indicate a rise in employment levels and consequently enhanced economic opportunities.

2. Which nation has the highest GDP?

United States has the highest GDP in the globe. It is 19.485 trillion dollars.

3. Which countries are at the summit regarding the GDP Per Capita?

The first five countries when it comes to GDP Per Capita are Luxembourg, Singapore, Ireland, Qatar, and Switzerland.

4. How does GDP per Capita differ from Per Capita Income?

While GDP Per Capita measures the economic output available per person in a nation, Per Capita income is the income earned by each person in the nation.

5. Are GDP and GDP Per Capita ideal indicators of a country’s growth?

Although GDP and GDP Per Capita cover specific economic dimensions of a nation, they are not the ultimate indicators of its growth. 

Many other factors need to be evaluated while analyzing the overall growth of a nation. That is why other metrics should always supplement these two.

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