not the fall classification European GDP per capita continues to generate debate in Portuguese society. It’s a good sign. It means that we remain concerned about the performance of our economy and the levels of well-being in our society. The poor performance of the Portuguese economy can be illustrated both by the level of GDP per capita, or by the difference in relation to the European Union average. In a country with an intermediate income level like Portugal, with a GDP per capita which in 2021 would correspond to 74% of the EU, devalue the importance of GDP as did the deputy of the Socialist Party Ascenso Simões it is to devalue serious social inequalities, scourges such as child poverty and the near absence of social mobility.

We can have different views on the causes of the stagnation of the Portuguese economy. Some will come from wrong economic policy decisions. Others will have an external origin. But the solution to the most serious social problems that plague us will always depend on achieving higher income levels. And we, belonging to one of the richest regions on the planet, will always be responsible for the results achieved.

The development of countries cannot be evaluated exclusively by GDP per capita because this measure has limitation. For this reason, economists have sought other measures to assess the well-being or happiness indices of societies. One of the most interesting projects is the World Happiness Report🇧🇷 In addition to GDP per capita, this happiness index takes into account dimensions such as social support, generosity, freedom to choose, healthy life expectancy and perception of corruption. In the EU, Portugal appears in 25th position. That is, when we consider other dimensions of well-being, Portugal appears in an even worse position than when we consider only GDP per capita (21st in the EU, in this case). In turn, Romania, which has a GDP per capitain purchasing power parity similar to the Portuguese, in the happiness index, it appears in 13th position in the EU.

Last week I showed here the huge reduction in income inequality in the EU over the past 20 years. This is a result that should be celebrated by all Europeans. In fact, data on the evolution of GDP per capita, controlled for purchasing power, show a strong convergence of the poorest countries towards the income levels of the richest countries. In 2000, the 11 poorest countries in the EU, with Romania at the bottom, had in common having lived for decades under the Soviet yoke or the socialist dictatorship of Tito. This result is yet another example of the failure of communist regimes to create wealth. These countries, having joined the market economy and once integrated into the EU’s great area of ​​economic freedom, took advantage of their wealth creation potential and converged to EU income levels. The economic success of these countries was achieved in very diverse political regimes, including the ‘illiberal democracy’ of Hungary, where there is a very serious violation of political freedom and high levels of corruption. In this, and other cases, political institutions have serious flaws, not being a model to follow.

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