Ireland’s per capita GDP in second place among EU countries, new report shows

The EU statistics office has released a preliminary estimate which uses purchasing power standards (PPS) – an artificial currency – to compare the economies of 27 European countries.

According to the report, Ireland is just behind Luxembourg at 111pc, above the average EU PPS of 100pc.

The PPS eliminates the differences between currencies and price levels in the different countries to compare their purchasing power parities (PPPs).

The PPPs indicate price level differences across countries to show how many PPS units some goods and services cost in different countries.

The report explained that Ireland’s performance can be explained by the presence of multinational companies.

“The high level of GDP per capita in Ireland can be partly explained by the presence of large multinational companies holding intellectual property,” it said.

“The associated contract manufacturing with these assets contributes to the GDP, while a large part of the income earned from this production is returned to the companies’ ultimate owners abroad.”

Over the last year, 10 out of the 27 EU countries compared had GDPs above the EU average.

Luxembourg was top of the list with 141pc. Along with Ireland, it was ahead of countries like the Netherlands (35pc above the EU average), Denmark (28pc) and Belgium (17pc).

The report said: “The high GDP per capita in Luxembourg is partly due to the country’s large share of cross-border workers in total employment.

“While contributing to the GDP, these workers are not taken into consideration as part of the resident population which is used to calculate GDP per capita.”

Earlier this year, the Central Statistics Office (CSO) said that Ireland’s GDP had shown moderate growth last year, up by 0.3pc compared with the previous year.

In the last quarter of the year, it had decreased by 1.3pc which the CSO noted was driven mainly by a fall in the multinational-dominated industry sector last year.

Other countries where the per capita GDP was above the EU average included Belgium, Austria, Germany, Sweden, Malta and Finland. France, Italy, Cyprus, Spain, Czechia and Slovenia were less than 10pc below the average followed by Lithuania and Portugal at 10pc to 20pc below.