Indicator 10.10 Purchasing power adjusted GDP per capita

Gross domestic product (GDP) is a measure for the economic activity. It refers to the value of the total output of goods and services produced by an economy, less intermediate consumption, plus net taxes on products and imports. GDP per capita is calculated as the ratio of GDP to the average population in a specific year. Basic figures are expressed in purchasing power standards (PPS), which represents a common currency that eliminates the differences in price levels between countries to allow meaningful volume comparisons of GDP.

Indicator is used to monitor progress towards SDG 10 on reducing inequality within and among countries; which is embedded in the Europen Comission’s Priorities under ‘Supporting people, strenghtening our societes and our social model’. Indicator can be considered as similar to global SDG indicator 8.1.1 “Annual growth rate of real GDP per capita”. Furthermore, indicator is also an impact indicator for the Strategic Plan 2020-2024 referring to the 10 Commission priorities.

The indicator is also relevant in the context of the recently adopted European Pillar for Social Rights, which sets out a number of key principles to support fair and well-functioning labour markets and welfare systems. Those principles address topics related to inequality, by tackling both inequality of outcomes (income and wealth inequality) and inequality of opportunities: from wage-setting to social protection systems (including minimum income), gender equality, enabling social services, childcare and support to children, old-age income, health care and access to housing.

The long-term objective for the indicator is to progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average by 2030.