The world of today is an ever-expanding ecosystem of growing population and diversity. As this population multiplies day by day, so does the need to stay connected.
The diversity offered by different continents is varied and distinguishable in nature. This diversity is related to the size of the population, the “urban” class, and the wealth of the nation. This “wealth”, often associated with the quality and living standards is what separates one country from another.
There are different rankings of the countries according to the living standards and quality of living of their residents. The European continent, despite being the second smallest continent in the world, houses some of the richest nations. It has abundant natural resources and commercial prowess, making it the hub of trade and commerce. The is full of advancing civilizations and its countries continue to dominate in technological, commercial, and trade areas. Nevertheless, the unique features of rich countries in Europe make them stand out from the countries on other continents.
Here is a look at some of the richest countries in Europe, and the features which set them apart from the rest of the countries. The data gives figures for the years 2019-2020 according to the GDP growth rate.
The Richest Nations in Europe
Luxembourg (GDP: $118,001 per capita)
Luxembourg may be a small European country, but it is one of the richest countries in Europe. It has neighboring countries of France, Belgium, and Germany and is a landlocked nation that is famous for its low inflation and low rate of unemployment. The Government of Luxembourg has been introducing a series of policies to control the rate of inflation and increase the rate of employment. Perhaps this is the reason why Luxembourg enjoys a robust economy that is one of the best in the world.
Over the years, Luxembourg has shown remarkable progress in diverse fields such as logistics, medical research, financial services, and space technology. The financial industry of the country is the key part of its GDP, accounting for more than 35% of it. Ever since the launch of cross-border funds in the 1990s, Luxembourg has witnessed huge growth in the investment fund sector. This is the reason why Luxembourg ranks second in the list of the world’s largest investment funds domicile.
Ireland (GDP: $94,391 per capita)
Situated off the coast of England and Wales, the Republic of Ireland amasses considerable wealth. Although the country faced a slump in the economy after 2018, owing to a slowdown in domestic demand, Ireland still shows an appreciable GDP per capita. The reasons behind the strong economic status of Ireland lie in several factors—a strong export sector, low inflation, and good growth of employment. Furthermore, the country offers lenient tax policies and measures, which have encouraged foreign and domestic investments alike. Although the past few years have witnessed more stringent tax laws and regulations, analysts predict that the Irish economy will continue to prosper in the future.
Switzerland (GDP: $72,873 per capita)
Switzerland is one of the world’s biggest free-market economies and is a nation with an appreciable GDP income. Over the last few years, this country has witnessed some strong financial growth—mainly owing to its highly-developed service sector. This service sector branches further into the tourism services and banking industry, which make a considerable portion of the country’s GDP. Although the agriculture sector makes up less than 1% of the total GDP, the industry sector—mainly the pharmaceutical industry, comprises the remaining portion of Switzerland’s GDP. In fact, Switzerland’s pharmaceutical industry is one of the most competitive and strongest ones in the world.
Norway (GDP: $65,800 per capita)
The wealth of a nation The standard of living of a country’s residents is an indicator of the wealth of that nation. This holds for Norway, which boasts of one of the best standards of living among the European countries. Although Norway has a mixed economic structure, it is heavily dependent on natural resources. It is also one of the world’s leading exporters of petroleum. In contrast to other European countries, Norway relies heavily on its industry sector. Almost 35% of GDP comes from its industry sector, while 63.5% comes from services and 1.6% from agriculture. Other than this, Norway is the largest exporter of seafood after China and is rich in natural resources such as gas, oil, timber, and fish.
Denmark (GDP: $58,932 per capita)
The Scandinavian country of Denmark is ranked as one of the wealthiest nations in Europe owing to its free-market economy. The country relies heavily on foreign trade and has a liberal trade policy. The traditional Nordic economic model is practiced in Denmark, whereby there is a high tax rate associated with a high level of services funded by the government. This is the reason why these high taxes contribute to a large portion of the GDP. For instance, the total taxes paid amounted to almost 51% of the country’s GDP in 2017. Analysts are positive that Denmark will show an upward trend in its economic metrics in the years to come.
Netherlands (GDP: $57,534 per capita)
Located in Northwestern Europe, Netherlands is well-known for its natural gas exports and is among the richest countries in Europe. In fact, natural gas is a major export of the Netherlands and is a contributor to its large, open economy. On the other hand, it is also the reason for the Netherlands’ declining manufacturing sector.
The wealth of the Netherlands depends heavily on its foreign trade and the main exported % commodities are chemicals, machinery, equipment, and food items. Almost 70% of the GDP comes from the services sector, 17.9% from industry, and 1.6% from agriculture.
Iceland (GDP: $55,965 per capita)
A Nordic Icelandic nation, Iceland is well-known for its small but strong economy. Although Iceland’s economy was heavily hit by the 2008 financial crisis, it has since recovered from the blow. The crisis had affected the Icelandic economy to such an extent that it had to take emergency funding from the IMF. The recovery that Iceland experienced has contributed to the booming tourism sector, which accounts for more than 10% of the country’s GDP. The country also has advancing software and biotech industries, both of which are well-known all over Europe. Another industry that contributes majorly to the country’s GDP is the fishing industry which accounts for 12% of GDP and 40% of its export earnings.
Austria (GDP: $55,218 per capita)
In the past, Austria mainly traded with Germany. Since it joined the European Union, the country has set up trading links with other European nations. This has resulted in increased growth in foreign investments, which has paved the way for further growth of the economy. Consequently, Austria strengthened its ties with other European countries which have opened its access to greater trade. The Austrian GDP comprises a contribution of services, agriculture, and industry sectors, which account for 70.3%, 1.3%, and 28.4%, respectively.
Sweden (GDP: $54,146 per capita)
Some European countries have undergone a massive change in their economies over the years. Sweden is one such country that has shifted from an agricultural economy to a manufacturing one. It has a major emphasis on engineering, steel, pulp, and mining. Similar to some other European countries, Sweden follows the Nordic model which focuses on high taxes and high government-funded services. Sweden is well-known for its progressing GDP and has the 4th highest total tax revenue as a percentage of GDP in Europe. Almost 65% of its GDP comes from the services sector, 33% from industry, and 1.6% from agriculture.
Germany (GDP: $54,075 per capita)
Germany, a country located in the West of Europe is a stretching landscape of forests, mountain ranges, and rivers. The highly-developed social-economic market of the country has propelled it to achieve great heights in the economic spheres. Germany has the second-biggest export trade in the world and this rate continues to climb up. In addition, its service sector is the largest contributor to its GDP (almost 70%). This is followed by the industry sector (29.1%) and agriculture (0.9%). The trade position of Germany is also strong—thanks to its contribution to pharmaceuticals, chemicals, rubber, and plastic. Moreover, as the country boasts of a wealth of natural resources, its products such as salt, lignite, timber, and potash are also in high demand.
The Last Word
The small continent of Europe contributes to a large part of the global wealth and prosperity. This is the reason why it houses some countries which have the highest GDP across the world. In terms of living standards, European countries enjoy a greater level of living standards than their counterparts in other continents. The escalating GDP and the economic prosperity of the European countries have made them an ideal place to start a business venture. Perhaps this is the reason why these European regions have witnessed a growth in foreign investments. It is hoped that these countries will continue to progress on the path of economic growth in the coming years too, thanks to their favorable economic policies.
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