Bucharest, January 12, 2025 – RBJ – According to Eurostat analyses, in the last 10 years there have been important changes in the national GDP of the member states, but also in their parity in terms of purchasing power.
In 2023, Eurostat shows, Luxembourg recorded the highest level of GDP per capita in the EU followed by Ireland, the Netherlands, Denmark and Austria.
Bulgaria had the lowest level of GDP per capita in the EU in 2023, behind Greece, Latvia and Slovakia.
Luxembourg had the highest price level for actual individual consumption in the EU in 2023, followed by Denmark and Ireland. Romania had the lowest price level, followed by Bulgaria.
This article presents the most recent analysis of purchasing power parities and related economic indicators (gross domestic product (GDP) per capita and actual individual consumption (AIC) per capita) for the years 2013-2023, focusing primarily on the latest reference year. It also presents the price level indices of the 27 EU countries, as well as of the 3 EFTA countries (Iceland, Norway and Switzerland) and 6 EU candidate countries (Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia and Türkiye).
In 2023, Luxembourg and Ireland recorded the highest levels of GDP per capita in the EU, at 137% and 113% above the EU average. Bulgaria was the EU country with the lowest GDP per capita, at 36% below the EU average. Levels of actual individual consumption were somewhat more homogeneous, but still showed significant differences across Europe. Luxembourg recorded the highest level of AIC per capita in the EU, at 36% above the EU average, as well as the highest price level, at 51% above the EU average.
In international comparisons of national accounts data, such as GDP per capita, it is desirable not only to express the figures in a common currency, but also to adjust for differences in price levels. Failing to do so would result in an overestimation of GDP levels for countries with high price levels, relative to countries with low price levels.
The dispersion in GDP per capita across the EU Member States is quite remarkable. Luxembourg had the highest GDP per capita among all the 36 countries included in this comparison, in 2023 being well above the EU average (by almost 2.4 times). This is partly explained by the fact that a large number of foreign residents are employed in the country and thus contribute to its GDP, while they are not part of Luxembourg’s resident population. Their consumption expenditure is recorded in the national accounts of their country of residence. The high level of GDP per capita in Ireland can be partly explained by the presence of large multinational companies holding intellectual property. The associated contract manufacturing with these assets contributes to GDP, while a large part of the income earned from this production is returned to the companies’ ultimate owners abroad.
In 2023, Ireland came second among the EU countries, at 113% above the EU average, followed by the Netherlands, Denmark and Austria, each with a GDP per capita of more than 20% above the average. The EFTA countries Norway, Switzerland and Iceland had a level of GDP per capita of 71%, 54% and 35% above the EU average, respectively.
Belgium, Germany, Sweden, Malta and Finland were the other EU countries with a GDP per capita above the EU average. France, Italy, Cyprus, Slovenia, Spain and Czechia had a level of GDP per capita of less than 10% below the EU average. Lithuania, Portugal and Estonia had a GDP per capita between 10% and 20% below the EU average. The GDP per capita of Romania, Poland, Hungary, Croatia, Slovakia, the candidate country Turkey and Latvia was less than 30% below the average. Greece and Bulgaria had a GDP per capita of less than 40% below the average. The candidate country Montenegro was placed at 49% below the EU average, followed by the candidate countries Serbia, North Macedonia, Albania, and Bosnia and Herzegovina.
Among the EU countries, Luxembourg had the highest volume index over the whole period and Bulgaria the lowest. However, the dispersion decreases over this period, in 2013 the highest GDP per capita was 6 times higher than the lowest, where in 2023 it was lowered to almost 4 times.
While GDP is mainly an indicator of the level of economic activity, actual individual consumption (AIC) is an alternative indicator better adapted to describe the material welfare of households.
Countries’ volume indices of AIC per capita can be found in the attached table. Generally, levels of AIC per capita are more homogeneous than GDP but still there are substantial differences across the EU countries.