Irish people second-richest in EU last year despite high cost of living

Data shows Irish people are 134pc better off than the average EU citizen. Photo: Marc Condren

Sarah Collins

Irish people were over two times better-off than the average EU citizen last year, figures show, but the data is exaggerated by the number of foreign firms here.

Even after adjusting for the cost of living, Ireland’s gross domestic product (GDP) per person was 134pc above the bloc’s average, making Ireland the second-richest country, behind Luxembourg.

However, the EU’s statistics agency, Eurostat, said Ireland’s wealth was overstated by the fact that multinationals hold large amounts of patents and other intellectual property here, the income from which is ultimately sent back to their home countries.

GDP is a measure of the total value of goods and services produced in an economy. Adjusting it per head of population and for purchasing power, as Eurostat does in its figures, gives a broad measure of the standard of living – but it does not measure individual income.

The Government prefers to measure wealth in terms of modified gross national income, which strips out aircraft leasing and some patent transactions.

The cost of living in Ireland is well above the rest of the EU, although this was accounted for in the Eurostat data.

Luxembourg’s wealth – GDP per capita there was 161pc above EU average in 2022 – is inflated by a high number of highly paid foreign workers that are not Luxembourgish residents but whose income is recorded in the country’s data.

Luxembourg and Ireland are leagues ahead of the EU’s next-richest states.

Denmark, a country renowned for its high standards of living, has a GDP per capita just 36pc above EU average.

The Netherlands was next with per-person wealth 30pc above average.

Austria, Belgium, Sweden, Germany, Finland, Malta and France also have GDP above the EU average.

The bloc’s poorest country, according to the figures, is Bulgaria, with GDP per capita 41pc below the EU average. Greece and Slovakia were just under 40pc below average.

Poland, Hungary, Portugal, Romania, Latvia and Croatia all had GDP of less than 30pc below the EU average.

The figures matter because they are used to calculate countries’ access to EU regional funding - poorer countries get more money.

Ireland, as a “rich” country, has contributed slightly more to the EU budget than it receives each year.

But other Eurostat data shows why ordinary consumers in Ireland might not feel better off.

In 2021, consumer goods and services in Ireland were 44pc above the EU average, placing it at the top of the bloc’s league table overall.

Ireland was the most expensive place in the bloc for housing, healthcare, alcohol and tobacco and the third-most expensive place to buy food that year. Denmark and Luxembourg were close behind.