Politics and Elections

Europe’s GDP per capita expressed in PPS for 2021

By: Vibor Cipan Published on: March 26, 2022, and filed under Economics
  • There are substantial differences between the EU member states.
  • At the top - Luxembourg stands at 227% of the EU average.
  • Bulgaria sits at the end of the list - being 45% below the EU average.
Ranging from 55% of the EU average in Bulgaria to 277% in Luxembourg, GDP per capita expressed in PPS paints a picture of stark differences among member states.

In the newest flash estimate of PPS (purchasing power standards), a stark difference between the EU's top performers and the poorest members is visible. From Luxembourg to Bulgaria, let's visualize how countries are performing.

Why it matters: Understanding the complex economic relations within the European Union and its member states is crucial for Europe’s policies. Richer countries contribute more to the shared budget, and poorer countries try to achieve convergence towards higher GDP values. Many programs and funds exist within the EU to support that convergence.

 

What are PPP and PPS: Purchasing power parities (PPP) are economic indicators of price level differences between countries. Instead of just looking at the GDP per capita, PPP tells us how many currency units a given quantity of services or goods costs in different countries.

Closely related to PPP is PPS (purchasing power standard). In simplest terms, PPS is an artificial currency unit. In theory, one PPS buys you the same quantity of services and goods in each country. 

But there’s a challenge since there are price differences between different countries, and you will need different amounts of national currency units to buy the same amount of services or goods. So, to get the PPS value, you need to divide any economic aggregate of a single country in national currency by its specific PPP.

 

Why do we express GDP per capita in PPS? Expressing GDP per capita in PPS is useful when comparing different countries and their economic standards. It effectively eliminates the price level differences and allows for meaningful volume comparisons.

 

Show me the map: Ranging from 55% of the EU average in Bulgaria to 277% in Luxembourg, GDP per capita expressed in PPS paints a picture of stark differences among member states.

 

Ranging from 55% of the EU average in Bulgaria to 277% in Luxembourg, GDP per capita expressed in PPS paints a picture of stark differences among member states.
Ranging from 55% of the EU average in Bulgaria to 277% in Luxembourg, GDP per capita expressed in PPS paints a picture of stark differences among member states.

Table of European Union GDP volume index per capita (in PPS, estimates for 2021)

 

MEMBER STATE GDP per capita in PPS, EU27=100
Bulgaria 55
Greece 65
Slovakia 68
Croatia 70
Latvia 71
Romania 73
Portugal 74
Hungary 76
Poland 77
Spain 84
Estonia 87
Cyprus 88
Lithuania 88
Slovenia 90
Czechia 92
Italy 95
Malta 98
European Union – 27 100
France 104
Euro area – 19 countries  (2015) 105
Euro area – 18 countries (2014) 105
Finland 113
Germany 119
Austria 121
Belgium 122
Sweden 123
Netherlands 132
Denmark 133
Ireland 221
Luxembourg 277

 

 

What’s the source: The original dataset was produced by Eurostat.