It’s back to pre-pandemic levels Hellas GDP per capita in terms of purchasing power is always compared with the rest of the countries of the European Union, but remains at a very low level. According to preliminary data released yesterday Eurostat, GDP per capita in Greece formed in 2022 at the level of 68% of the average European Union and ranks third after Bulgaria and Slovakia.

The key question, of course, is whether a complete picture of the reality of the Greek economy and the living conditions of the Greek population can be drawn from this element. First, production and income in Greece, despite the exit from the memorandums, have not returned to pre-crisis levels. In 2011, GDP per capita in Greece was at the level of 75% of the EU average, and back in 2007 it was at the level of 95%. The recession in Greece continued after 2018, with GDP per capita at 66% of the EU average, the same as in 2019, only to decline further during the pandemic years, i.e. over the two years from 2020 to 2021. In 2016, Greece’s GDP per capita was 68% of the European average. economic crisis and then the pandemic led to increased economic inequality in Greece. It is significant from the above that if in 2008 households with an income of up to 750 euros accounted for only 4.7% of the total, in 2018 their share reached 12.7%.

The explanation for the failure to return to pre-pandemic levels and the large deviation from the EU is due to the very large size of the so-called internal devaluation that took place in the country in the previous decade, at a time when the countries of the former Eastern Europe were developing. It is worth noting that other countries that survived the financial crisis of the previous decade are performing much better than Greece. For example, in Portugal, GDP per capita in terms of purchasing power is 77% of the EU average. and in fact it has been at these levels in previous years as well. In Spain, it reached 85% of the EU average in 2022, recovering from the pandemic, while it was just over 90% in the previous decade.

What, of course, we should not ignore is that the GDP in general and of course per capita in Greece seems to be low due to the large scale of tax evasion. As a reminder, according to tax returns for 2022 (income for 2021), only 2.558 million taxpayers show a family income of up to 5,000 euros per year (including zero returns). In other words, almost 40% of taxpayers in Greece say they live on less than 400 euros per month net.

In addition, the fact that Luxembourg and Ireland have GDP per capita appear to be 161% and 134% respectively higher than the EU average. this is due to the specific conditions for the formation of GDP in these two countries: in Luxembourg, most of the GDP is produced by foreign citizens, so the numerator is large and the denominator is small. On the other hand, Ireland’s high GDP is associated with the activities of transnational giants and the transfer of high value-added intellectual property rights to the country.