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Written Answers. - Comparison of EU Living Standards.

Wednesday, 12 June 1996

Dáil Éireann Debate
Vol. 466 No. 7

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 12. Mr. B. Ahern Information on Bertie Ahern Zoom on Bertie Ahern  asked the Taoiseach Information on John Bruton Zoom on John Bruton  the indicator regarded as the most accurate measure of living standards on a per capita basis, such as GNP, GDP, GNDI or any other indicator. [12046/96]

 13. Mr. B. Ahern Information on Bertie Ahern Zoom on Bertie Ahern  asked the Taoiseach Information on John Bruton Zoom on John Bruton  the GNP per capita for each of the years 1973, 1980, 1986 and 1990 to 1994; and the percentage of the EU average this represented. [12048/96]

The Taoiseach: Information on John Bruton Zoom on John Bruton I propose to take Questions Nos. 12 and 13 together.

The UN and EU systems of national accounts define a number of indicators for measuring the performance of a country's economy but there is no generally recognised single measure of national living standards or economic well being. The three most widely used indicators are: (1) gross domestic product which measures the income generated from productive activity in this country irrespective of whether producer units are Irish or foreign owned; (2) gross national product which measures the income from productive activity which actually accrues to Irish residents; GNP is calculated by deducting from GDP the income made [1851] in Ireland that is paid to foreign investors and adding income made by Irish residents on their overseas investments; (3) gross national disposable income which is defined as GNP plus net current transfers from overseas including in particular EU current transfers. All three measures can also be calculated on a net basis to exclude depreciation.

GNP, rather than GDP, is a more appropriate measure of the economic well being of this country because it excludes the repatriated profits of foreign owned companies and other net factor income outflows including national debt interest. However, national disposable income is a more comprehensive indicator of the income available to the nation because of the substantial amounts of transfers received from the EU. Household disposable income, which is compiled after the deduction of direct taxes represents the income available to households for consumption or savings and is therefore an appropriate measure of trends in personal living standards.

It is necessary for international comparisons to take account of the different price levels of goods and services in each country. Currency exchange rates are influenced by several factors and are not considered a good indicator of relative price levels. Because of this, for international comparisons, the national accounts aggregates are usually converted using the so called “Purchasing Power Standards”.

I propose to circulate in the Official Report a table to Deputies giving the relevant Gross National Product per capita for Ireland and the EU. The data are presented in “Purchasing Power Standards” the most usual measure for international comparisons.

GNP per capita at market prices (pps)

Year IRL EUR15 %
1973 1,870.00 3,180.00 58.8
1980 4,125.16 7,200.62 57.2
[1852]1986 6,208.02 11,212.46 55.4
1990 9,232.58 14,760.12 62.6
1991 10,171.48 15,260.38 66.7
1992 10,889.97 15,820.59 68.8
1993 11,182.57 15,788.77 70.8
1994 12,484.73 16,500.45 75.7


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