21 June 2006

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Business Today

Malta ain’t no Ireland or Luxembourg

For the past decade Malta has often been compared to Ireland or Luxembourg in terms of economic performance but never as today have these comparisons been so ill-conceived. While Malta only manages to achieve an index of 69 in terms of GDP per capita, Ireland and Luxembourg emerge as Europe’s top two havens for wealth with respective indices of 137 and 248.
Statistics published by Eurostat compare the GDP for the 25 EU member states, the acceding and candidate countries as well as EFTA members.
With the EU25 having an average of 100, Malta is 30 per cent below the average, surpassing member states Hungary, Estonia, Slovakia, Lithuania, Poland and Latvia.
Malta’s figure is the same level as that of Portugal and the Czech Republic.
Eurostat acknowledged that the high level of GDP per inhabitant in Luxembourg is partly due to the large share of cross-border workers in employment there. This contributes to the GDP, which is then divided only on the resident population.
The same report shows that the acceding and candidate countries are well below the EU25 average, while all the EFTA countries have a higher figure that compares well with that reached by the top placed EU countries.
In interpreting these results one has to understand the data that is used for the compilation of statistics. Eurostat uses national currency figures, price surveys and the GDP expenditure from national accounts. All these have a bearing and are aggregated. The GDP per inhabitant provides a measure of the total economic activity in a country and also reflects the economic development of a country.
Although provisional figures may not be the best measure for comparability and ranking of one country in relation to another, Malta must note that it has to improve its overall economic performance to rank in line with the EU25 average as well as with the Euro area, a new target we are aspiring to reach at the earliest.

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