IRELAND’S GROSS domestic product per head was the fourth highest among the 27 EU states in 2011, according to new data published yesterday by the EU’s statistic agency, Eurostat.
By a measure that more closely reflects household incomes and spending – actual individual consumption (AIC) – Ireland ranked 12th out of 27.
Irish per-head AIC was exactly average for the EU.
By the GDP measure per head, Ireland was 27 per cent above the average. Only Luxembourg, the Netherlands and Austria had higher GDP per-capita levels last year.
Ireland has an unusually large gap between GDP and AIC per person. This reflects the presence of a very large foreign-owned corporate sector.
GDP is a measure of output. As a considerable proportion of the profits generated from this output do not remain in Ireland as income for residents, the gap between output and income is large. From the mid-1990s, when Irish per-head GDP first exceeded the average, it grew rapidly until 2007.
When it peaked in that year Irish GDP per head was 48 per cent above the average. The decline since then is the largest of any EU member state.
While measures such as GDP and AIC are frequently used as a proxy for wealth, they offer only a partial picture of how rich countries are.
As with individuals, measuring wealth requires not only consideration of income but also of net worth (the difference between the value of all assets and liabilities).
Separate figures published by the Central Bank in April show Irish households’ net worth was 5.5 times their disposable income in 2010. By this measure Irish households were the seventh richest in Europe.
Yesterday’s Eurostat data also showed Luxembourg recorded both the highest per-capita levels of GDP and AIC among the EU 27. The top 10 by both measures are all western European countries.
The bottom 10 are all countries that were ex-communist economies. At the bottom end of the scale was Bulgaria, with less than half the average per-head GDP and AIC.
Greece, in 11th position, had the lowest per-capita GDP and AIC among the long-standing market economies. Greek GDP per head was 84 per cent of the average last year and 94 per cent of the average by the AIC measure.
