Malta wealthier, EU study finds

Malta is getting richer, although the island is still a long way off from achieving the average level of prosperity reached in the EU.

According to a new EU survey, the island's economy is in much better shape than many other EU regions both in the "old" and "new" member states.

While being four times poorer than London, measured by GDP per inhabitant, Malta is only slightly less well-off than the average throughout Italy. But it is better off than Sicily or the southern Italian regions.

The same holds true when Malta is compared to some regions in Spain, Greece and Portugal, which have been members of the EU for decades.

The measure of wealth is based on a methodology known as Purchasing Power Standard (PPS), an artificial currency that takes into account differences in national price levels.

Malta's purchasing power per inhabitant (18,200 PPS units) stood at 77 per cent of the EU average (which stands at 23,600 PPS, i.e. 100 per cent) in 2006. This signified an increase of 870 PPS units per inhabitant over the previous year.

While it may be positive from one angle that Malta is getting more prosperous, there is a negative side too - it could lead to fewer funds coming our way from EU coffers next time the bloc's seven-year budget is set.

According to EU rules, only those member states and regions with an average GDP per capita of less than 75 per cent of the EU average are eligible to the maximum possible funds.

This means that if Malta's economy continues to grow at the current pace, it will not be possible to obtain as much funding as it received in the 2007-2013 financial package, which amounted to at least €855 million. The figures will be decided in 2011/2012.

In general, Eurostat's data show that in 2006, the four leading regions in the ranking of regional GDP per inhabitant were inner London (336 per cent of the average), the Grand Duchy of Luxembourg (267 per cent), Brussels (233 per cent) and Hamburg (200 per cent).

The 20 lowest ranking regions were all in Bulgaria, Hungary, Poland and Romania, with the very lowest figures recorded in northeastern Romania and Severozapaden in Bulgaria (both 25 per cent of the average).

GDP per inhabitant provides a measure of the total economic activity in a region and may be used to compare the degree of economic development between regions.

However, it does not measure the income ultimately available to private households in a region.