The Malta Independent 23 July 2019, Tuesday

Figures show GDP growth leaving households behind

David Lindsay Thursday, 20 June 2019, 09:43 Last update: about 2 months ago

Figures released by Eurostat, the EU’s statistical arm, yesterday demonstrate how the benefits of the economic boom that the government brags about are not exactly trickling down to households.

The figures show that Actual Individual Consumption by Maltese households, a measure of material welfare of households, was only 80% of the EU average while gross domestic product stands at 98% of the EU average.

ADVERTISEMENT

The figures clearly demonstrate that while gross domestic product, the measure of the market value of all the final goods and services produced by the country, has very nearly converged with the EU average.

But, in reality, this economic growth does not appear to be trickling down to the man in the street.  This is evidenced by the fact that the AIC stands at a far lower 80% of the EU average.

The AIC yardstick consists of goods and services actually consumed by individuals. In international volume comparisons of consumption, AIC is often seen as the preferable measure, since it is not influenced by the fact that the organisation of certain important services consumed by households, like health and education services, differs greatly across countries.

AIC per capita for 13 Member States lay between the EU average and 25% below. In Italy, Cyprus, Ireland, Spain and Lithuania the levels were 10% or less below the EU average, while Czechia, Portugal and Malta were between 10% and 20% below and Poland, Slovenia, Slovakia and Greece between 20% and 25% below.

AIC per capita expressed in Purchasing Power Standards (PPS) varied from 56% to 132% across the bloc.

For example, 10 Member States recorded AIC per capita above the EU average in 2018. The highest level in the EU was recorded in Luxembourg, 32% above the EU average. Germany was around 20% above, followed by Austria, Denmark, the United Kingdom, the Netherlands, Finland, Belgium, Sweden and France, which all recorded levels between around 5% and 15% above the EU average.

Six Member States recorded AIC per capita 25% or more below the EU average. Estonia was 26% below, Latvia and Romania were 30% below, while Hungary and Croatia had AIC per capita just under 40% below and Bulgaria was 44% below.

GDP per capita ranged from 50% in Bulgaria to 254% in Luxembourg, of EU average

Gross Domestic Product (GDP) per capita, a measure of economic activity, also shows substantial differences between the EU Member States. In 2018, GDP per capita expressed in PPS ranged between 50% of the EU average in Bulgaria and 254% in Luxembourg. Eleven Member States recorded a level of GDP per capita above the EU average in 2018.

Malta’s stood at 98%.

  • don't miss