Report: Estonia overtakes Portugal in key economic indicator
RELATIVE WEALTH: Estonia is slowly moving up the ladder of the EU ranks in terms of wealth and has now caught up with Portugal, according a recent CIA report.
TALLINN - A report by the U.S. Central Intelligence Agency indicates that Estonia has overtaken Portugal in terms of GDP per capita at purchasing power parity, attesting to the Baltic state's gradual gains vis-a-vis its West European peers.
Estonia ranked 55th in the world by purchasing power parity with a per-capita purchasing power of $20,300 per year, on the basis of 2006 figures used for the CIA Factbook, a widely used compilation of sovereign data.
The respective figure for Portugal, which joined the EU in 1986, was $19,800, putting the country in 57th place.
The result is the first indication of the considerable progress the Baltic state has made since rising from the ashes of a planned economy in 1991, as well as joining the EU in 2004. A combination of liberalization and foreign investment have allowed Estonia to not only become the wealthiest Baltic state, but to begin ascending the ladder of EU nations in terms of GDP per capita 's much as Ireland did in the 1990s.
Latvia and Lithuania were ranked 64 and 66 respectively in the newest table with $16,000 and $15,300 in per-capita purchasing power.
Purchasing power parity reflects differences in the price levels in different countries that currency exchange rates do not take into account. The indicator allows economists to more accurately compare the economic development of various countries.
A British weekly magazine, The Economist, even invented the Big Mac Index to compare standards of living across the world since the ingredients of the hamburger are locally made nearly everywhere.
But Estonia still has its work cut out to catch up with its neighbors. Finland ranked 21st with $33,700 in the CIA ranking, while Sweden was 25th with $32,200.
To the east, Russia ranked 82nd with $12,200.
Of the nine countries that joined the EU together with Estonia in 2004, Slovenia ($23,400), the Czech Republic ($21,900) and Malta ($21,400) ranked higher. Malta was 54th, one place higher than Estonia.
On the other hand, Estonia's GDP is growing at a higher rate than the other new EU members, barring Latvia. Together with a net migration outflow, this means Estonia could continue climbing the ranks and overtake yet more countries.
The list was topped by Luxembourg with a per-capita purchasing power of $71,400. In second place was Bermuda with $69,900, and Jersey, a Channel Island municipality, with $57,000.