2001/6 10 April 2001

GDP per capita in OECD countries:

New Zealand’s relative position

Introduction This Background Note looks at New Zealand’s Gross Domestic Product (GDP)
per capita figure and ranking within the Organisation for Economic Co-
operation and Development (OECD) from 1970 to 1999. There are currently 30
members of the OECD, with GDP per capita data available for 29 of these (the
Slovak Republic joined in 2000). New Zealand gained membership of the
OECD on the 29th May 1973.1

GDP & GDP Gross Domestic Product (GDP) is a measure of economic activity within an
economy during a set time period, normally one year. GDP per capita is a
per capita figure (calculated by dividing GDP by the population level) that can be used as
an indicator of living standards between countries and within a country over
time. While GDP per capita figures provide useful indicators of living
standards, there are some limitations. These include the fact that GDP: 2
• excludes the value of the non-market activity of households and
communities, such as housework and volunteer work,
• does not measure the distribution of income within the community,
• does not take account of various other aspects which contribute towards
quality of life such as the level of crime and the state of the environment,
• and measures output within New Zealand rather than by New Zealanders
(i.e. includes output of foreign owned entities within New Zealand).

Purchasing International comparisons of monetary amounts are highly dependent on the

Power method used to convert data to a common currency. One method is to use
market exchange rates, however they can be volatile and may not necessarily
Parities reflect the relative prices levels between the countries concerned. In order to
(PPPs) make international comparisons it is common practice to use Purchasing
Power Parities (PPPs). PPPs are special exchange rates calculated to reflect
relative price levels when converting to another currency. GDP per capita
figures converted to US dollars using PPPs reflect relative standards of living
better than conversions using market exchange rates.3

The calculation of GDP per capita involves GDP, population and PPP figures.
All three are estimates and are liable to a margin of error. As a result, data on
1
OECD www.oecd.org/about ; OECD (1999) National Accounts: Main Aggregates 1960 - 1997 p. 2.
2
Dr Alan Bollard (2000) Proxies for Living Standards – Do Economists Need to Worry About Social Goals? Treasury.
www.treasury.govt.nz/speeches/socialgoals/proxies.asp
3
For example, in 1999, New Zealand’s GDP per capita was US$14,376 when converting using market exchange rates, but $18,629
using 1999 PPPs. Prices in New Zealand were such that our GDP per capita had a greater purchasing power than was indicated by a
conversion to US dollars using normal exchange rates. www.oecd.org/std/gdpperca.htm
 GDP per capita may not always be totally accurate, and rankings may be
misleading.

New In terms of GDP per capita, New Zealand was ranked 20th out of 29 OECD
countries in 1999, compared with 9th place in 1970 and 18th in 1985.4 In dollar
Zealand’s terms New Zealand’s GDP per capita was $17,873 in 1999 (1995 United
ranking States dollars), or approximately 82% of the OECD average. This places us
behind the United Kingdom and just ahead of Spain.

Figure 1 shows an index of GDP per capita for New Zealand, Australia,
Ireland, Japan, Korea and for the total OECD for years 1970 to 1999 (1970 =
100). During this period, Korea’s GDP per capita increased by 435 percent,
while New Zealand’s increased by 34 percent (at the price levels and PPPs of
1995). Over the same period the GDP per capita figure for the total OECD
increased by 82 percent.

Table 1 shows the estimated GDP per capita for OECD countries for various
years since 1970 in 1995 United States dollars. Figure 2 illustrates these
figures for 1999.

Table 2 shows the ranking of each OECD country in terms of GDP per capita
for various years since 1970. Figure 3 illustrates New Zealand’s ranking from
1970 to 1999.

NZ’s ranking The above series goes back to 1970, however some internationally
prior to comparable figures further back are available. According to the United
Nations, New Zealand was ranked 3rd in terms of GDP per capita in 1953
1970? behind the United States and Canada, and just ahead of Switzerland. By
1960, New Zealand’s ranking had dropped to 7th place, with the United States,
Canada, Sweden, Luxembourg, Switzerland and Australia ahead of us.5

Figure 1. Index of GDP per capita for New Zealand, Australia, Ireland, Japan, Korea, and for OECD
total, 1970 to 1999 (1970 = 100)

550
NEW ZEALAND
500
A u s t r a lia
I r e la n d
450
Japan

400 K o re a
O E C D T o ta l
(1970 = 100)

350
Index

300

250

200

150

100
1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

Year

Source: OECD, OLISnet Database.

4
Measured in United States dollars at the price levels and PPPs of 1995. This takes account of inflation within the countries, so that
figures are comparable between countries and over time.
5
United Nations (1982) Yearbook of National Accounts 1980: Volume II International Tables pp. 3-9.
2
Table 1. GDP per capita, at the price levels and PPPs of 1995 ($US)

Change in GDP per

Country 1970 1975 1980 1985 1990 1995 1999 capita 1970 to 1999
Australia 14,018 15,181 16,715 18,103 19,517 21,845 24,680 10,662
Austria 11,661 13,933 16,462 17,606 20,209 21,454 23,410 11,749
Belgium 12,533 14,695 17,089 17,911 20,621 21,838 23,845 11,312
Canada 14,460 16,891 19,090 20,762 22,273 22,901 25,247 10,787
Czech Republic .. .. .. .. 12,937 12,365 12,574 ..
Denmark 15,618 16,376 18,177 19,984 21,180 22,974 24,856 9,238
Finland 11,324 13,529 15,350 17,274 19,981 18,856 22,621 11,297
France 12,372 14,141 16,145 17,108 19,574 20,197 21,762 9,390
Germany 12,795 14,074 16,605 18,005 20,339 21,404 22,548 9,752
Greece 7,715 9,593 11,145 11,561 12,404 12,828 14,369 6,653
Hungary .. .. .. .. .. 9,064 10,683 ..
Iceland 11,743 14,990 19,428 20,604 22,782 22,250 25,760 14,016
Ireland 7,772 9,173 10,707 11,662 14,824 18,117 24,770 16,999
Italy 11,355 12,619 15,415 16,610 19,082 20,119 21,203 9,848
Japan 11,178 12,942 15,314 17,484 21,426 22,644 23,401 12,223
Korea 2,834 3,790 4,902 6,672 9,989 13,603 15,153 12,319
Luxembourg 15,549 16,996 18,751 21,052 27,626 33,556 39,609 24,060
Mexico 5,232 6,111 7,283 7,165 7,044 6,833 7,787 2,555
Netherlands 13,725 15,331 16,860 17,531 19,805 21,249 23,863 10,138
NEW ZEALAND 13,346 14,935 14,246 16,018 15,954 17,051 17,873 4,527
Norway 10,858 13,361 16,367 18,784 19,983 23,306 25,721 14,863
Poland .. .. .. .. 6,383 7,022 8,660 ..
Portugal 6,611 7,855 9,379 9,563 12,639 13,765 15,680 9,070
Spain 8,663 10,704 11,171 11,664 14,368 15,218 17,489 8,826
Sweden 14,369 16,028 16,877 18,307 19,979 19,953 22,125 7,757
Switzerland 20,870 21,264 23,186 24,292 27,021 25,661 26,817 5,947
Turkey 3,367 3,969 4,019 4,501 5,280 5,638 5,949 2,582
United Kingdom 11,474 12,576 13,729 15,125 17,521 18,631 20,426 8,952
United States 16,941 18,410 20,972 23,301 26,084 27,895 31,457 14,516
OECD Total 11,989 13,342 15,198 16,580 18,882 19,987 21,858 9,868
Source: OECD, OLISnet Database.

Figure 2. GDP per capita 1999, at the price levels and PPPs of 1995 ($US)

4 0 ,0 0 0

3 5 ,0 0 0

3 0 ,0 0 0

2 5 ,0 0 0

2 0 ,0 0 0

1 5 ,0 0 0

1 0 ,0 0 0

5 ,0 0 0

0
Luxembourg

NEW ZEALAND
Switzerland

United Kingdom

Czech Republic
Iceland

Denmark

Ireland

Australia

Belgium

Austria

Germany

Italy

Mexico
United States

Netherlands
Norway

Canada

Japan

Finland

Sweden

France

Spain

Portugal

Korea

Greece

Hungary

Poland

Turkey

Source: OECD, OLISnet Database.

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Table 2. GDP per capita rankings, at the price levels and PPPs of 1995 ($US)

C hange in r anking
C o u n tr y 1970 1975 1980 1985 1990 1995 1999 1970 to 1999
A ustralia 7 8 10 9 16 9 9 -2
A ustria 14 14 12 12 10 11 12 2
B elgium 11 11 7 11 8 10 11 0
C anada 5 4 4 4 5 6 6 -1
C zec h Republic .. .. .. .. 22 25 25 ..
D enmark 3 5 6 6 7 5 7 -4
Finland 17 15 16 15 12 17 14 3
Franc e 12 12 14 16 15 14 17 -5
Germany 10 13 11 10 9 12 15 -5
Greec e 22 21 21 22 24 24 24 -2
Hungary .. .. .. .. .. 26 26 ..
Ic eland 13 9 3 5 4 8 4 9
Ireland 21 22 22 21 20 19 8 13
Italy 16 18 15 17 17 15 18 -2
J apan 18 17 17 14 6 7 13 5
K orea 26 26 25 25 25 23 23 3
Luxembourg 4 3 5 3 1 1 1 3
Mexic o 24 24 24 24 26 28 28 -4
Netherlands 8 7 9 13 14 13 10 -2
N E W ZE ALAN D 9 10 18 18 19 20 20 -11
Norway 19 16 13 7 11 4 5 14
P oland .. … .. .. 27 27 27 ..
P ortugal 23 23 23 23 23 22 22 1
S pain 20 20 20 20 21 21 21 -1
S weden 6 6 8 8 13 16 16 -10
S witzerland 1 1 1 1 2 3 3 -2
Turkey 25 25 26 26 28 29 29 -4
United K ingdom 15 19 19 19 18 18 19 -4
United S tates 2 2 2 2 3 2 2 0
Note: From 1970 to 1985 there are rankings for 26 OECD countries, 28 countries for 1990, and 29 for 1995 and 1999.
Source: OECD, OLISnet Database.

Figure 3. New Zealand’s GDP per capita ranking 1970 – 1999

25

20
GDP per capita ranking

15

10

0
1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

Year

Source: OECD, OLISnet Database.

Grant Cleland, Economist

Research and Analysis Group
Parliamentary Library
For more information contact Grant (ext.9173)

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