GDP per capita stays put

Malta's Gross Domestic Product (GDP) per inhabitant last year remained the same as in 2007, according to a new set of statistics issued in Brussels yesterday.

Measured in Purchasing Power Standard (PPS), an artificial currency that eliminates price level differences between countries, in 2008 Malta's GDP per inhabitant stood at 76 per cent of the EU average and one per cent less than in 2006.

This measurement is usually used to calculate the level of progress made by each country over the years and is particularly useful when the EU carries out negotiations with member states on the allocation of EU funds under its seven-year financial perspectives. In 2005, when such negotiations were last conducted, Malta had managed to qualify for the biggest allocation of funds possible as its GDP was still 25 per cent less than the EU average.

This level has now been surpassed and according to the latest statistics Malta will not be able to obtain the same funding level next time round, probably in 2011, when the next EU financial perspectives will be decided. EU rules stipulate that its major allocations should go to those member states whose GDP is 25 per cent below the EU average.

According to the EU's statistics office, Malta's GDP per inhabitant last year was more than three times lower than Luxembourg's but almost twice that of Bulgaria.

Apart from Luxembourg, by far the most prosperous EU member state when it comes to GDP per inhabitant, Ireland, the Netherlands, Austria, Denmark and Sweden also recorded very high GDP per capita when compared to the EU average.

On the other end of the scale, Romania and Bulgaria were 50 and 60 per cent below.

Although Luxembourg by far outshines all the other EU member states, there is also an interesting reason for this.

The duchy's high GDP is mainly due to the country's large share of cross-border workers in total employment.

While contributing to GDP, these workers are not taken into consideration as part of the resident population which is used to calculate GDP per inhabitant. Many of those working in Luxembourg do not reside in the duchy even though they still pay their taxes there.