An IMGW News Report
Luxembourg may still be among Europe’s wealthiest regions, but it is no longer the undisputed leader in terms of GDP per capita, adjusted for purchasing power. According to 2023 data from Eurostat, Ireland’s Eastern and Midland region now tops the chart, surpassing Luxembourg’s GDP per capita when measured in purchasing power standard (PPS), an artificial currency unit that neutralises cross-border price differences.
While Luxembourg’s GDP per capita in PPS was recorded at 237 in 2023—2.37 times the EU average—Ireland’s Eastern and Midland region stood at 245, 2.45 times the EU average. This marks a shift from 2022, when Luxembourg remained the wealthiest region, albeit narrowly trailing behind Southern Ireland.
”’Luxembourg’s economic outlook appears more positive for 2024, with GDP growth projected at 1.2%, showing a rebound from the prior year’s downturn.”
PPS is a statistical tool designed to make international comparisons by adjusting for the varying costs of goods and services across countries. It allows for a more accurate representation of living standards by showing how much a typical consumer can purchase in each region.
In 2023, Southern Ireland held third place with a GDP per capita of 2.24 times the EU average. Other regions in the top five include Prague and Brussels. Meanwhile, Turkey’s eastern regions, including Van, Muş, Bitlis, and Hakkari, rank among the continent’s poorest, with a GDP per capita of just 28 PPS. The French overseas department of Mayotte is the least wealthy, with 27.6 PPS.
Luxembourg’s modest decline of around 1.1% from 2022 can be partly attributed to its 2023 economic recession. Despite a 1.4% growth in 2022, Luxembourg faced negative growth forecasts of -0.4% in 2023. This decline was exacerbated by government expenditure outpacing revenues, largely due to subsidies to counter inflation and rising energy costs, as well as higher personnel costs.
However, Luxembourg’s economic outlook appears more positive for 2024, with GDP growth projected at 1.2%, showing a rebound from the prior year’s downturn.
