Thursday, June 21, 2018

Irish 2017 per capita standard of living again below Italy and EU-28 average

Actual Individual Consumption (AIC) is a useful proxy for material standard of living and is based on goods and services actually consumed by individuals, irrespective of whether these goods and services are purchased and paid for by households, by government, or by non-profit organisations. 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 a lot across countries. Data are adjusted for price differences — Purchasing Power Standards (PPS) — and the AIC is more reliable than gross domestic product (GDP) per capita which tracks more than household welfare. Eurostat reports that in 2017 Ireland was again below the EU-28 average and also below Italy.

The average German had consumption that was 30% ahead of Ireland’s.

Eurostat says 10 member states recorded AIC per capita above the EU average in 2017. The highest level in the EU was recorded in Luxembourg, 30% above the EU average (but that is distorted as over 40% of the duchy’s workers reside outside the country). Germany and Austria were around 20% above, followed by the United Kingdom, Finland, Belgium, Denmark, the Netherlands, France, and Sweden which all recorded levels between 9% and 14% above the EU average.

AIC per capita for 12 member countries lay between the EU average and 25% below. In Italy, Ireland and Cyprus the levels were 10% or less below the EU average, while Spain, Lithuania, Portugal and the Czech Republic were between 10% and 20% below. Malta, Greece, Slovenia, Poland, and Slovakia were between 20% and 25% below the average.

With the EU-28 at 100 and Euro Area at 106, Ireland is at 94; Italy at 98 and Germany at 122.

See Eurostat report here.

Six member countries recorded AIC per capita about 30% or more below the EU average. Estonia, Latvia, and Romania were around 30% below, while Hungary and Croatia had AIC per capita just under 40% below the EU average and Bulgaria was 45% below.

Eurostat says on GDP per capita, Ireland comes second among the EU member states, at 84% above the EU-28 average (reflecting multinational tax avoidance distortions) followed by the Netherlands and Austria at 28% above that average. The EFTA (European Free Trade Agreement) member states Switzerland and Norway have a level of GDP per capita of around 60% and 50% above the EU-28 average, respectively followed by Iceland at around 30% above the average.

The modified Irish Gross National Income (GNI*) — adjusted for foreign multinational distortions — was valued at 38% lower than GDP in 2017: €181bn vs €294bn. The value of Irish GDP per capita here was €61,200 and the adjusted value was €38,000 compared with €40,000 for Germany and €50,000 for Denmark.

Other EU states with a GDP per capita of more than 20% above the EU-28 average are Denmark, Germany, and Sweden while Belgium has a level of GDP per capita just below 20% above the average. Finland, the United Kingdom, and France show GDP per capita levels of up to 10% above the average.

Italy: A century of annual budget deficits and high public debt

OECD Better Life Index 2017

The Better Life Index includes both economic and social indicators.

As per the chart, Ireland’s average net adjusted disposable income per capita (including transfers) was US$25,439 a year in 2015, lower than the OECD average of $30,563 — based on 2010 Purchasing Power Parities (PPPs), to eliminate price differences for same or similar goods and services. The country ranking was 19/ of 38.

Jobs Gender Inequality was at 24/38; Social Inequality was 27/38; Education Attainment 23/38; Student Skills 7/38.

See full details for Ireland here.

Consumer Prices

Eurostat reported this week that consumer prices in Denmark in 2017 were 42% above the EU average, Luxembourg was second at 27% and both Ireland and Sweden were third at 25%.

Denmark is the most expensive for food and non-alcoholic beverages as well as for footwear, while for clothing, Sweden is the most expensive country. Ireland has the highest prices for alcoholic beverages and tobacco. Among all countries surveyed, Switzerland has the highest price level for food and non-alcoholic beverages and Iceland for alcoholic beverages and tobacco, clothing and footwear.

 Eurostat report