Median Household Income Overview
The indicator refers to the median income of a household in a country. Median household income divides households into two equal segments, such that the first half earns less than the median income while the second half earns more. Median income is defined in PPP (Purchasing Power Parity, in Current International Dollars) terms so as to avoid exchange rate fluctuations due to inflationary tendencies across countries. The median income level is generally accepted as the better indication of well-being or actual income distribution as it is not skewed by disproportionate data.
According to GlobalData, the top ten countries with highest median household income in the world are Singapore, Iceland, Norway, Sweden, Ireland, Luxembourg, Belgium, United States, Cyprus, and Australia. The average median household income (PPP) was $40,094 in 2021.
Colombia’s Median Household Income Highlights in 2021
Colombia’s median household income (PPP) hit $15,812 in 2021, an increase of 1.7% over the previous year. Between 2010 to 2021, Colombia’s median household income increased by 36.1%.
The country’s Human Development Index (HDI) rank is indicative of its moderate performance in terms of social development. Although Colombia’s performance is better than other countries in the Latin American region, it performs poorly compared to other emerging nations. According to the United Nations Development Program (UNDP), Human Development Report (2020), the country's HDI score was 0.767 out of 1 and it was ranked 83rd among 189 countries, indicative of the poor living standards experienced by some of the population.
According to the World Bank, the country’s Gini index was 51.3 in 2019. The Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. It is calculated on a scale of zero (perfect equality) to 100 (perfect inequality).
Key elements that are influencing the Global Economy
Increased COVID-19 impact:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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