

A WIDENING GAP EMERGING
Whilst Cyprus is considered one of the more prosperous countries within the European Union, evidence suggests that there is a widening gap slowly developing between affluent and working-class groups all over the island. Prosperity is measured using various factors amd some of the metrics used are often not as accurate as they should be. Key indicators used to assess prosperity typically include GDP per capita, economic growth, quality of life, and employment rates. Cyprus currently ranks among the European Union countries with the lowest poverty rate. This rate has been recently set at just 2.4%. This is in stark contrast to Romania, which has the highest poverty rate recently set at 19.8%.
A RELATIVELY HIGH GDP
Although Cyprus has a relatively high GDP per capita, compared to many other European Union countries, the island has faced huge challenges in its recent past. Sectors on the island, like tourism, financial services, and offshore shipping remain strong, but these have not sheilded recent European economic downturns that have affected the island. The weak political instability, mainly due to the island’s unique situation regarding its division, have also negated many of its economic benefits. Cyprus is also experiencing gradual rises in unemployment rates. This has begun to impact its social benefit responsibilities. All of these underlying factors are all working against otherwise strong economic returns. Other European Union countries, such as Luxembourg, Ireland, and Denmark typically rank higher in terms of overall prosperity mainly because of this.Â

WHAT IS GDP?
GDP stands for Gross Domestic Product and is used to measure a country’s economic performance. GDP represents the total monetary value of all finished goods and services produced within a country’s borders in a specific period. The measuring period is usually annual but quarterly GDP figures can also be measured. GDP is genrally used to indicate an economy’s overall health. It is often used to compare economic performance between different countries or periods.


The four primary ways to calculate GDP are
1. Production Approach: This approach measures the total output of goods and services, subtracting the value of intermediate goods to avoid double counting.
2. Income Approach: Calculates the total income earned by individuals and businesses, including wages, profits, rents, and taxes, minus subsidies.
3. Expenditure Approach: This approach sums up all expenditures made in the economy, including consumption, investment, government spending, and net exports.
4. Nominal Approach: This is measured using current prices that are adjusted for inflation in real time, providing a more accurate reflection of an economy’s size and how it is growing over time.