Per Capita Income and Income Distribution

With economic growth, a country's GDP increases, and so does the per capita income. Although per capita income is a figure obtained by dividing the country's GDP by its population, it is evident that it is an important indicator in the income grouping of countries and in comparing countries.

Each year, at the beginning of July, the World Bank calculates and publishes the per capita income of countries, categorizing them into different income groups. This calculated per capita income reveals both the current status and any changes in the income group of countries.

Especially for countries on the threshold of moving from a low-income to a lower-middle-income group or from the upper-middle-income group to the high-income group, the threshold values announced by the World Bank are critical data.

### Türkiye's Per Capita Income

In its calculation for 2023, the World Bank classified countries with a per capita income of $13,846 or higher as high-income countries.

Türkiye, with a per capita income of $10,659 in 2022, was classified in the upper-middle-income group that year.

In 2023, Türkiye's per capita income reached $13,110. Whether Türkiye will remain in the upper-middle-income group or rise to the high-income group will be determined by the new threshold value to be announced by the World Bank in early July.

### Per Capita Income and Income Distribution

The calculated per capita income for countries gives an average figure. This means it assumes everyone, rich or poor, earns the same amount, which is not the case. Many people earn much more or much less than this average income.

Therefore, the calculated per capita income does not provide information about the income distribution within a country or how equitable the income distribution is.

There are several indicators used to understand the income distribution within a country, the most prominent being the Gini coefficient.

The Gini coefficient ranges from 0 to 1. The closer it is to 1, the more unequal the income distribution. The closer it is to 0, the more equal the income distribution.

For 2023, the Gini coefficient was estimated to be 0.433.