S’pore is the richest country thanks to… low prices?

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Yesterday Singapore’s Mothership revived last month’s ranking of the “richest countries of 2025” published by the esteemed British weekly, The Economist. I have to say, I missed the original release and was curious to see what it says (unfortunately, a lot of it is misleading).

And, lo and behold, in terms of nominal GDP per capita Singapore was ranked 2nd in the world, and when corrected for considerably lower local prices it was catapulted to number 1!

Yes, Singapore was ranked as the “richest” (their words, not mine) country in the world after we take into account more competitive local costs, which elevate the nation’s purchasing power parity (that is, how much of the same things you can buy locally compared to other countries).

Sadly, it falls to 8th when we consider longer working hours here—but we’ll get to that in a moment. In terms of the real value of “earnings,” Singapore is at the top of the world (again, words of The Economist, not mine):

So, why do I keep emphasising the claims made by The Economist? Because they are a factual misrepresentation.

As Mark Twain liked to say…

Lies, damned lies and statistics

Unusually, I’m using the phrase popularised by Twain not to assail the numbers—because the numbers are fine in this case—but how they are framed by a publication that portrays itself to be an authority on economics.

First of all, using the term “rich” in reference to GDP is incorrect. But then, conflating it with “earnings” and “salaries” is no longer a simple error but criminal incompetence—or an outright lie. It is wrong from every angle.

GDP doesn’t measure how “rich” countries are, nor does it show the size of the “earnings” of their populations.

The word “rich” is commonly used in reference to wealth rather than income. Just like a person making a lot of money might not be rich, quite unlike a pensioner drawing a CPF pension, while enjoying the wealth of his past savings and sound investments.

Singapore, for instance, has enormous reserves worth S$1 trillion or more, but they are not captured in this “ranking”. Conversely, several of the countries listed there (including the US) are sinking into public and/or private debt. How are they rich exactly?

As for relation to “earnings”: in theory, yes, the GDP does reflect the sum of all “incomes” generated in the economy—but they consist not only of the wages collected by its population but also corporate profits, rents and interest.

By no means, then, is it a reflection of the earnings of its people, and it should never even be implied that it is related to their salaries (although, of course, people in countries with higher GDP are usually paid better).

Gross Domestic Product is a measure of the total economic output of a country, nothing else.

What this ranking shows is that Singapore is the 2nd most productive economy in nominal and 1st in real terms (yes, it’s cheaper than direct competitors) in the world, per year. Though on an hourly basis it drops to 8th place.

It’s still a valid claim to fame, but nothing like what the British magazine says.

How rich is Singapore, then?

There are other rankings that measure the wealth of countries and their populations. UBS releases a Global Wealth Report every year, showing both the mean and median for the richest nations. Singapore currently ranks 7th for the former and 18th for the latter.

This, however, does not capture Singapore’s public reserves or assets held by the private corporate sector. The total net worth of the nation vs. the rest of the world—that is, the sum of its foreign assets minus its liabilities—is reflected in the Net International Investment Position.

In terms of NIIP per capita, Singapore ranks 4th, behind Hong Kong, Andorra and Norway in 1st place.

But then there’s the question of the value of domestic assets. How much is what a country has in its possession actually worth? This is a whole other story (large countries have land and natural resources worth trillions). Is the Democratic Republic of the Congo rich, given that its mineral deposits are valued at US$24 trillion? You can see where this is going.

What I’m trying to say here is that estimating how rich a country is depends entirely on the specific thing you want to measure.

What you cannot do, however, is take the most basic GDP figures and try to tell your readers they mean something that they don’t.

Singapore is one of the most successful, productive and wealthiest countries in the world. Just not in the way The Economist is claiming it is.

• Read other articles we’ve written on Singapore’s current affairs here.

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