Eastern Europe’s Economic Surge: Surpassing Southern Europe’s Living Standards

Almost four decades after the fall of the Soviet Union, Eastern European countries that broke free from Soviet influence are set to surpass the living standards in Southern Europe, warns Bloomberg. This significant economic shift paints a promising future for these nations and highlights their rapid growth in the world economy.

The Gross Domestic Product (GDP) per capita in Slovenia, when adjusted for purchasing power parity, is projected to surpass that of Italy by 2029, according to the latest projections from the International Monetary Fund. Lithuania is expected to reach the same level as Italy, and Poland is closely trailing behind. These countries are set to outperform Spain by a few years.

Slovenia and Lithuania are at par with Spain, while Poland lags slightly behind. However, Slovenia, Lithuania, and Poland’s growth curves follow a steep upward trajectory, unlike Italy and Spain’s, which have relatively flatter curves.

According to Bloomberg’s analysis, which only includes these five countries and does not mention the Czech Republic, the Czech Republic’s GDP is very close to Lithuania based on IMF data from this year, with Slovenia holding a slight lead. The GDP per capita, adjusted according to purchasing power parity, is expressed in International dollars. Currently, the Czech Republic stands at 50,475, Lithuania at 50,600, Slovenia at 52,641, Italy at 56,905, and Spain at 52,012 dollars.

The numbers from Bloomberg confirm that younger members of the European Union are gradually catching up with the wealthier West. Access to the common market and foreign investments have contributed to this trend. However, Italy’s somewhat weaker economic growth also plays a role.

This wealth increase in Eastern countries has several implications. For instance, it changes and reverses the flow of incoming and outgoing workers looking for higher wages, concludes Bloomberg.