Impact of the NRRP and population decline: how Italy surpasses the United Kingdom in GDP per capita

ROME – Italians are richer than the British. The overtaking in per capita GDP, certified by the World Bank, is just a few hundred euros away, after two decades in which the United Kingdom overtook Rome. But now, thanks to inflation, immigration, the impact of NRRP funds, and—most importantly—the difference in population growth , Italians' per capita GDP has once again risen above that of British citizens.

Italy better than Great Britain: the precedent

It had already happened in 1987, when the index measuring the value of goods and services produced divided by the number of inhabitants showed Italians overtaking London. Until 2001, when our country slipped behind the United Kingdom for the next quarter of a century. In 2024, however, according to World Bank data, Italy's per capita GDP rose to $60,847 (£44,835) compared to the British average of $60,620. The British media didn't welcome the data with great enthusiasm; on the contrary, the Telegraph called it a " wake-up call " for Prime Minister Keir Starmer, a signal he must heed for a change in economic policy.

While acknowledging the merits of the Meloni government, which intervened on the tax wedge and adopted more measures to combat immigration, commentators underline how the overtaking is mainly due to one factor: the demographic gap .

Italy's per capita GDP grows thanks to population decline

With GDP growth similar to that seen in recent years, Great Britain has seen its population increase while Italy has long been experiencing population decline. This causes wealth per capita to grow more rapidly, even with the same GDP growth.

For George Buckley, chief economist for the UK and the eurozone at Nomura, this could also reflect the impact of the post-pandemic NRRPs and European funds on the Italian economy. "Italy's better performance than the UK is primarily in per capita rather than absolute terms," he told Bloomberg . "Over the six years from 2021 to 2026 , the UK's growth will outperform Italy's in four of them in terms of aggregate real GDP, while Italy will outperform the UK in all of those years in per capita terms."