There seems to be a discrepancy in Italy between salaries and GDP PPP per capita.

    Based on Numbeo, UK has a purchasing power(based on declared salaries) 36% higher than Italy. Judging by number of italian workers who come to the UK, and visiting both countries, I can confirm UK is richer. But GDP PPP per capita is the same.

    I inderstand GDP includes government spending and investment, but is that accounting for the whole difference?

    On a similar thread someone was saying ‘GDP should not be deflated using PPP because GDP is holistic (included government spending and investing) whereas PPP is limited as a consumption deflator’. But assume the extra income is invested directly into the country/economy, instead of being paid as wages, it should still he visible as an investment?
    Can someone elaborate further?

    Why is GDP per capita so high in Italy but salaries so low?
    byu/MelodicBed4180 inAskEconomics



    Posted by MelodicBed4180

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