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The ESPON 2013 Operational Programme
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GDP growth, 2010-2030


data source and more Map: Politecnico di Milano, ET2050
Data sources: Politecnico di Milano, MASST3 model

  • Annual GDP growth forecasts for the period 2010-2030 show territorial disparities between Northern and Southern Europe and within each county. Capital regions tend to be advantaged compared to more rural regions.
  • A moderate growth is expected for a majority of regions. Only very few more rural regions are likely to experience a decline of GDP over the entire period.
  • Capital regions and regions containing larger cities in the Northern and Central European countries are expected to have the highest annual growth of GDP. Least developed regions are likely to continue to be lagging behind in 2030, unless current political, technological and economic framework conditions change significantly.

Observations for policy

Annual growth of GDP is used as a proxy for increases in economic activity and production of wealth in European countries and regions. This can result from different factors: First, an increase in exports, linked either to an enhanced competitiveness, or to higher external demand for produced goods or extracted raw materials. Second, improved economic exchanges within the region, as actors improve their capacity to meet local demand. The challenge for forecast models is to take into account these different dimensions and interactions between them.

Territorial imbalances can be observed at different geographic levels. Growth of GDP is forecasted to be unevenly distributed in space over the next decades. Northern European countries and regions are expected to experience a more favourable economic development between 2010 and 2030 than their Southern European counterparts. According to the model, at the sub-national scale, regions including capitals and larger urban areas will grow relatively faster than more rural regions. The least developed regions will probably continue to lag behind also in 2030.

The economic crisis reversed the catching-up developments that had been observed prior to the crisis. These differences persist mostly across countries. The Sixth Cohesion Report concludes that rural regions have been more resilient to the economic and financial crisis. However in the aftermath of the crisis, the growth levels are in general lower than for urban regions.

Policy context

Growth and jobs are one of the main policy goals of Europe. The objectives from the Europe 2020 strategy, drafted in the light of the economic and financial crisis have been taken forward in EU Cohesion Policy 2014-2020. Eleven thematic objectives have been defined to address regional disparities across European countries and regions and within European countries.

One of four EU residents lives in a region with GDP per capita below 75% of the EU average. These regions are mostly located in Central and Eastern European countries, but also in Greece, Southern Italy, Portugal and most of the outermost regions. As the Sixth Cohesion Report stresses, the economic crisis has reversed a long trend of converging GDP and unemployment rates within the EU, affecting in particular regions in Southern Europe. Meeting the objectives of the Europe 2020 Strategy has become a bigger challenge for these regions. Rural regions have proven to be more resilient during the crisis year.

The Sixth Cohesion Report furthermore states that Cohesion Policy contributes to the estimated GDP of countries. For the period 2014-2030 for each euro spent in the main beneficiary countries, GDP is expected to be more than three euros higher.

Map interpretation

The map illustrates the expected economic growth for Europe’s regions within the baseline scenario, i.e. if current political, economic and technological framework conditions are maintained. The annual growth of GDP in Europe is foreseen to be moderate. The annual growth rate is on average 1.89% between 2010 and 2030.

However, as the map shows, economic growth is expected to be territorially uneven, leading to an increase in inter-regional disparities. 45 regions are expected to grow less than 1%, or even having negative growth over the whole period. These concern mostly less developed Southern European regions. More rural regions in Greece and Castilla-la-Mancha in Spain are the only regions expected to have annual decline of GDP for the period 2010-2030.

Countries in the Eastern Europe are expected to grow on average more than the Western and Southern European countries. The annual GDP growth rate in the Western European countries is forecasted to be 1.93% while 1.88% for the EU15 and EFTA countries.

Regional differences in GDP within countries are predicted to persist. Intra-national regional disparities increase in all countries. Regions including capitals, large cities and those that are more centrally located at national level in general outperform the regions which are more rural and peripheral at national level. This is especially evident in Romania and Bulgaria.

Overall, the baseline scenario suggests that the more developed a country or region is the more chances it will have to experience economic growth over the coming years. This implies that catching-up processes that made convergence between economic regions possible in the previous decades will not necessarily continue in the next two decades.

Concepts and methods

The annual growth of Gross Domestic Product (GDP) in percentage for the period 2010-2030 is forecasted using the MASST3 model. The map illustrates the forecast of annual GDP growth based on a Baseline scenario. GDP reflects the economic activity of an area.

MASST3 is an econometric, macroeconomic, sector, social and territorial model. It has been updated for the ESPON ET2050 project to better take into account the impact of the economic and financial crisis. The third version of this model includes public expenditure growth rates (based on relative difference between deficit/GDP ratio and stability pact targets), innovation rates (function of human capital and R&D intensity), urban growth (function of traditional and unconventional urban benefits, and urban costs e.g. quality of life, social conflict etc.), and regional unemployment growth (dependent among others on the labour market, structural funds policies, FDI).

The baseline scenario of the MASST3 model can be described as a ‘business-as-usual’ model. With regards to policies this implies that the actual trends continue and that the political, economic and technological framework is influenced by these trends but will not drastically change. With regards to the content, 19 different blocks have been built for the baseline scenario. These refer to European growth, regional disparities, employment rates, unemployment, productivity, R&D, North-South Structural Disequilibrium, Public Debt, Private Debt, Real Estate speculative bubble, Stable inflation, Trade, Trade by sector, Global finances, Reindustrialisation, Knowledge-based activities, education, service-oriented jobs, intelligent and regional agriculture.

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