The economy

This country rakes in trillions every year

When you think about wealthy countries, places like Dubai, China and the US might spring to mind. However, Europe has its fair share of rich countries too. The wealthiest of all has been revealed in new data this year, and it’s not Luxembourg or Sweden.

According to figures from the World Population review, Germany is Europe’s wealthiest country when judged by gross domestic product (GDP). Germany has a GDP of $5.45trillion (£4.026T).

What is GDP?

GDP is a way to measure a country’s productivity and prosperity. The GDP of a country is the total monetary value of all goods and services which that country produced within its borders over a year.

To calculate it, economists take the spending of everyday consumers, the investment of businesses in the country, and government spending and net exports to figure out the final calculation.

If GDP is rising year on year, it’s a good sign that the country is doing well financially. If it is consistently lowering, it’s a sign of an incoming recession.

Is it accurate?

GDP is not a very accurate indicator of the prosperity of a country’s people. It does not indicate how the wealth is distributed, nor the happiness or individual wealth of people.

These flaws are why GDP is often calculated alongside other metrics such as the Human Development Index, which measures the economy as well as life expectancy and education to get a better idea of how a country is functioning.

There’s also the Inclusive Wealth Index, which measures the “savings account” of a country by looking at infrastructure, natural resources and workforce alongside its finances.

How does the UK compare?

According to the most recent data, the UK is in second place with a GDP of $4.23trillion (£3.148T).

France is in third place with $3.17trillion (£2.654T), Italy fourth with $2.42trillion (£2.021T), and Russia fifth with $2.21trillion (£1.962T).

In the case of Germany’s GDP, it is larger than two other European nations combined. Portugal has $380.6billion (£281.0B), and Greece has $307.6billion (£227.1B).