Israel has officially surpassed Japan when it comes to GDP per capita, Prime Minister Benjamin Netanyahu said on Monday, a sign that the Jewish state is evermore affluent.
Israel enjoys GDP per capita of $42,120 — which is calculated by dividing the country’s total economic output by its number of people. In contrast, Japan’s GDP per capita is $40,850.
Netanyahu’s remarks, made at a Likud party faction meeting, signal that Israel’s growing economic clout and its booming hi-tech industry is overtaking, on a per capita wealth basis, Japan’s vaunted consumer electronics and automobile manufacturing.
It’s yet another sign that Israel’s economy continues to outperform other peers in the West, including in the United States and the euro-zone.
The world average for GDP per capita is $11,730, according to the International Monetary Fund, while advanced economies enjoy an average GDP per capita of $48,970.
The prime minister added that unemployment was at an all-time low, or at 3.7% in February 2018. Many economists deem that a state of “full employment,” or when the economy is such that all eligible people who want jobs can get one.
That said, income inequality in Israel continues to rise. The increasing GDP per capita merely points to a growing pie, and doesn’t necessarily indicate whether the pie is being divided more equitably.
And analysts from the IMF and OECD warn that unless Israel makes more headway in reducing social and educational gaps in the ultra-Orthodox and Arab sectors, Israel’s economic growth and competitiveness will falter.