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. The median income is defined in PPP (Purchasing Power Parity, in Current International Dollars) terms to avoid exchange rate fluctuations due to inflationary tendencies across countries. The median income level is generally accepted as a better indication of well-being or actual income distribution as it is not skewed by disproportionate data.
According to Global Data, the top ten countries with the highest median household income in the world are Singapore, Iceland, Norway, Sweden, Ireland, Luxembourg, Belgium, the United States, Cyprus, and Australia. The average median household income was (PPP) $40,094 in 2021.
Peru Median Household Income Highlights in 2021
Peru’s median household income (PPP) hit $17,252 in 2021, an increase of 0.9% over the previous year. Between 2010 to 2021, Peru’s median household income increased by 27.7%.
Despite the rapid economic growth in recent years, a wide disparity in income distribution is already a cause of unrest in many areas and may worsen if left unaddressed. The disparities between the urban and rural areas are acute, and economic development is yet to fully benefit the indigenous population. Additionally, the country was ranked 125th out of 156 countries on the health and survival parameter. The country’s Gini coefficient (a measure of income disparity, with zero corresponding to complete equity and 100 corresponding to complete inequity) was 41.5 in 2019, according to the World Bank. As per the World Bank, access to water and sanitation in Peru is among the lowest in Latin America.
According to Global Data, the Peruvian economy witnessed a strong recovery in 2021 with an annual GDP growth rate of 11.9%. The economic recovery was mainly driven by improving household demand, recovering global trade, and high levels of public investment.
Recent trends influencing Global Economic Growth
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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