The recession has taken a toll on economies around the world, from driving down standards of living to sending unemployment to record levels. Through it all, however, some nations’ people have emerged stronger and wealthier than ever before. Is there a trend among the richest countries on the planet, and can investors benefit from these economies’ gains?
Compiled from data from the International Monetary Fund’s 2013 estimates, here are the richest five nations among the world’s 50 largest economies, sorted by GDP per capita and adjusted for purchasing-power parity. While at least one expected name makes the list, a few may surprise you.
No. 5: Switzerland, $46,474 per person
Kicking off the list is Europe’s second-wealthiest country, Switzerland. The Swiss economy has performed remarkably well despite its proximity to recession-battered European nations. Switzerland’s GDP grew 3% in 2010 and an estimated 0.9% in 2012. Those aren’t eye-popping numbers, but compared to Europe’s far-reaching contraction, it’s a relieving dose of stability. Swiss citizens have gained from the country’s notoriety as a tax haven, and the country’s forward-looking moves — such as its preliminary agreement to a free-trade deal with China — should only benefit its economy in coming years. The IMF expects Switzerland’s GDP per capita to rise to more than $54,000 by 2018.
Investors can get in on the country’s good fortune as well. Swiss drugmaker Novartis AG (ADR) (NYSE:NVS) has been a standout stock among big pharmas, with shares gaining more than 45% over the past year. Novartis AG (ADR) (NYSE:NVS)’ future is bright with drugs such as its oral multiple-sclerosis medication Gilenya, which analysts have pegged to gain peak sales of between $2 billion and $3.5 billion. Among Swiss stocks, Nestle SA Reg Shs. Ser. B Spons (ADR) (OTCBB:NSRGY), which has seen its shares gain 20% over the past year, is poised to become a leader among the growing infant-nutrition business. Infant nutrition has risen especially sharply in emerging markets such as China, and Nestle SA Reg Shs. Ser. B Spons (ADR) (OTCBB:NSRGY)’s one of the top players poised to capitalize. Investors have plenty to pick from in this wealthy nation.
No. 4: United Arab Emirates, $49,883 per person
A few Middle Eastern nations have profited in a big way from the region’s oil bounty, but few have done so as successfully — and as publicly — as the UAE. Dubai, the country’s largest city, has exploded into a desert metropolis as the nation’s citizens have enjoyed top-tier gains in standards of living. The nation’s still in the middle of developing, with tourism playing an important role in the country’s economic growth. Foreign investment has also supercharged the country’s economy, with more than $10 billion in foreign investment entering the country in 2011. The IMF’s estimates are optimistic: The organization expects the UAE’s GDP per capita to grow to more than $57,000 by 2018.
The nation’s rise has been a boon for the country’s markets, which recently hit multiyear highs. While investing in this rising star isn’t so easy as investing in an established nation such as Switzerland, Middle East ETFs such as the Market Vectors Gulf States (ETF) (NYSEARCA:MES) offer exposure to the brightest growth story in the region. Almost 30% of this ETF’s exposure is concentrated in the UAE, the second-leading nation in the ETF and trailing only Kuwait.
No. 3: United States, $51,248 per person
I think most investors will recognize this nation. For all the hits the U.S. economy has taken throughout its slow recovery from the depths of the recession, the average American still lives a remarkably wealthy lifestyle. Falling unemployment, which declined to 7.5% recently, and the country’s housing rebound have helped America dig out of the economic doldrums. The IMF expects good things ahead for the U.S., predicting a per-capita GDP of more than $63,000 by 2018.