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Statistics Explained

Data extracted in March 2025.

Planned article update: June 2026.

Economic development in European Neighbourhood South countries

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Data extracted in March 2025.

Planned article update: June 2026.

Highlights

In 2023, disparity in GDP per capita was wide between ENP-South countries for which data were available: from €3 607 in Morocco to €48 392 in Israel, which was higher than the EU average of €38 140.

In 2023, economic activity rates in the ENP-South countries varied from 33.2% in Jordan to 72.3% in Israel — a rate close to that of the EU (75.0%). Tunisia recorded the second-highest rate after Israel at 51.5%, followed by Egypt at 45.3%.

When it comes to gender gaps in economic activity within the ENP-South, disparities are stark: Tunisia shows a 41.5 percentage points gap (72.5% men versus. 31.0% women), Palestine reaches 59.2 pp (78.5% versus. 19.3%), while Israel stands out with near parity (74.2% vs. 70.5%).

In 2023, unemployment continued to pose a significant socio-economic concern for several ENP-South countries, with rates estimated at 29.6% in Lebanon (2022 data), 18.4% in Palestine and 15.4% in Tunisia (2022 data), all standing well above the EU average of 6.1%. Conversely, Israel reported a significantly lower unemployment rate of 3.4%.

Infographic showing the unemployment rates in the EU, Algeria, Egypt, Israel, Lebanon, Morocco, Palestine and Tunisia in 2023.
Source: Eurostat (nama_10_pc) and (enps_lfsa_urgan)

This article is part of an online publication. It presents information on recent economic developments in nine European Neighbourhood Policy-South (ENP-South) countries, namely, Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine [1] and Tunisia, comparing them with developments in the European Union (EU). This article does not contain any data on Syria, as cooperation with Syria was suspended since 2011 until recently, and no data are currently collected. Lebanon data does not account for Palestinian refugee camps in Lebanon.

Given that data collection for ENP-South countries is non-obligatory and subject to various changes related to the political and geographical context, data availability may often show inconsistency over the entire period presented or for recent years.

This article presents, among others, statistics on the gross domestic product (GDP), measured in € and in € per capita; the size of the labour force compared to the total population of working age; the contributions of the respective main (non-financial) economic sectors to total employment and gross value added (GVA); the gross fixed capital formation in these economies; the trade balances of goods and services with the rest of the world from the balance of payments statistics; foreign direct investments (FDI) flows; and the number of persons employed by the public and private sectors.

Gross domestic product (GDP)

Gross domestic product (GDP) is an aggregate measure of the size of an economy, based on its total final output. The estimated combined GDP of the ENP-South countries was €1.32 trillion according to the latest data available. In comparison, the GDP of the EU was €17.2 trillion in 2023. However, it should be noted that for some ENP-South countries, the most recent data dates back several years.

In 2023, Israel remained the dominant economy in the ENP-South group with a GDP of €472.1 billion. Between 2013 and 2023, Israel also recorded the strongest growth: +110.1% (from €224.7 bn). Lebanon was the only country with a decline in GDP over the period, from €35.2 billion in 2013 to €16.8 billion in 2021 (-52.4%). For comparison, the EU’s GDP in 2023 stood at €17.2 trillion, marking an increase of 48.3% from €11.6 trillion in 2013.

Line chart showing GDP at market prices in euro billions in the European Neighbourhood Policy-South countries Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine and Tunisia from 2013 to 2023.
Figure 1: Gross domestic product, 2013-2023
(€ billion)
Source: Eurostat (nama_10_gdp) and (enps_nama_10_gdp)

Real gross domestic product, also called GDP at constant prices, focuses on the volume of output, disregarding price changes. The calculation of the annual growth rate of GDP at constant prices, in other words the real change in GDP, allows comparison of the dynamics of economic development, both over time and between economies of different sizes, regardless of developments in price levels and exchange rates.

Data on annual change in real GDP are shown in Figure 2 for the period 2019-2023.

From 2019 to 2023, the ENP-South countries experienced highly diverse economic trajectories, shaped first by the onset of the Covid-19 pandemic and later by the broader challenging international context. In 2019, growth patterns already varied widely: Egypt led with robust expansion (+5.6%), Israel (+3.8%) and Morocco (+2.9%) followed with moderate growth, while Lebanon and Libya were already in deep contraction (-6.8% and -11.9% respectively). The year 2020 marked the onset of the pandemic’s economic impact, leading to contractions in all ENP-South countries and the EU, with the sole exception of Egypt, which maintained growth at +3.6%. The magnitude of contraction varied, from a mild reduction in Israel (-1.5%) and Jordan (-1.1%) to sharp downturns in Tunisia (-8.7%), Morocco (-7.2%), Palestine (-11.3%), and a particularly severe decline in Lebanon (-24.6%). In 2021, most countries rebounded strongly - notably Israel (+9.5%), Morocco (+8.2%), and Palestine (+7.0%) while others, including Egypt and Jordan, posted more moderate recoveries. Growth remained positive into 2022 for all countries with data available, however momentum varied: Egypt, Israel, and Algeria recorded solid growth, while Morocco and Tunisia saw more subdued growth. By 2023, a clearer divergence emerged. Most ENP-South economies continued to grow, albeit unevenly: Algeria recorded the strongest expansion (+4.1%), followed by Morocco (+ 3.4%) and Egypt (+3.8%). Jordan maintained stable performance and Tunisia registered a marginal increase (+0.3%, provisional). In contrast, Palestine returned to contraction in 2023 (-5.4%, estimated), reflecting renewed instability. Data for Lebanon and Libya remain unavailable for 2022 and 2023, limiting regional comparability, though earlier figures point to deep structural crises in both economies. Overall, while the region has largely moved beyond the initial pandemic shock, recovery has been uneven and remains vulnerable to internal fragility and external pressures, including continued global uncertainty and geopolitical tensions.

The EU experienced a sharp contraction in 2020 (-5.6%), followed by a robust rebound in 2021 (+6.3%) and moderate growth in 2022 (+3.5%). However, growth decelerated significantly in 2023, reaching only 0.4%, pointing to a slowdown in post-pandemic momentum.

bar chart showing the year-on-year growth in real GDP, measured in percent change compared with the previous year, for the EU, Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine and Tunisia for 2019 to 2023. The bars represent the real GDP growth of a country for each year, with the bars coloured according to year.
Figure 2: Growth in real gross domestic product, 2019-2023
(chain linked volumes, % change compared with previous year))
Source: Eurostat (nama_10_gdp) and (enps_nama_10_gdp)

Analysis of GDP per capita (per person) removes the influence of the population size, making comparisons between different countries easier. GDP per capita is a broad economic indicator that may be used for a basic analysis of living standards.

Furthermore, GDP per capita can be adjusted using Purchasing Power Parities (PPPs), which helps comparisons between countries. This adjustment takes into account differences in price levels, giving a clearer view of both living standards and the real value of economic output.

As shown in Table 1, although GDP per capita increased in 2023 for the EU and most ENP-South countries with available data, Israel stood out as the exception, registering a sharp decline of -7.8% compared to 2022. Nevertheless, Israel continued to lead the region, recording the highest GDP per capita among ENP-South countries, approximately €48 392 per inhabitant in 2023, well above both other countries in the region and the EU average.

In the other ENP-South countries for which recent data are available, the GDP per capita in 2023 was more comparable across countries, ranging from €3 607 in Morocco to €4 943 in Algeria.

As for the countries with less recent data, GDP per capita in Lebanon was estimated at around €9 609 in 2018, while it was around €9 132 in Libya in 2019. For Egypt, the most recent data showed a GDP per capita of €1 834 in 2017, well below the other ENP-South countries that year.

In comparison, GDP per capita in the EU averaged €38 140 in 2023.

table showing GDP in euro per capita in the EU and the European Neighbourhood Policy-South countries Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine and Tunisia for the years 2013 to 2023.
Table 1: Gross domestic product per capita, 2013-2023
(€ per capita)
Source: Eurostat (nama_10_pc) and (enps_nama_10_pc)

Labour force

The labour force consists of the economically active population. It includes both employed and unemployed persons, while the economically inactive population is composed, among others, of students, pensioners, persons caring for other family members and those who are unable to work because of long-term sickness or disability. Only the working-age population (15 to 64 years) is considered in the data analysed. A high rate between the labour force and the whole population is considered a pillar to build a stable economy.

Figure 3 shows that in 2023, the activity rate across ENP-South countries generally remained significantly lower than in the EU, with many countries reporting total participation rates below 50.0%, compared to 75.0 % in the EU. At the top of the scale, Israel led with 72.3%, nearly matching the EU’s rate of economically active persons of 75.0%, while Tunisia followed as a distant second at 51.5%. At the bottom, countries such as Jordan (33.2%), Egypt (45.3%), and Algeria (46.1%) recorded notably lower rates, with Lebanon (48.8 %) and Morocco (48.9 %) also remaining below the regional benchmark.

Regarding economic activity rates by gender, the overarching trend across the ENP-South is a persistent and substantial gap favouring men, with most countries reporting female activity rates below 30%. The gender gap — measured as the difference in participation rates between men and women — is particularly pronounced in Palestine (59.2 percentage points (pp)), Egypt (56.0 pp), Algeria (53.5 pp), and Morocco (52.6 pp). Significant gaps are also observed in Lebanon (47.7 pp), Tunisia (41.5 pp), and Jordan (39.2 pp).

In contrast, Israel distinguishes itself with the highest female activity rate (70.5%) in the region and a gender gap of just 3.7 pp (albeit still favouring men) — notably smaller than the EU (9.6 pp).

No recent data on the economic activity rate are available for Libya.

The EU shows a relatively balanced participation with 79.8% of men and 70.2% of women active in the labour force, with a gender gap of 9.6 pp, whereas most of the ENP-South countries display considerably wider disparities.

bar chart showing the total economic activity rate and the rates for men and women, respectively, with bars colour coded according to sex, as percentage of the corresponding population aged 15-64. The data cover the EU and the ENP-South countries Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestine and Tunisia for the year 2022, or most recent available reference year. Recent data are not available for Libya.
Figure 3: Economically active persons by sex, 2023
(% of total/men/women aged 15-64)
Source: Eurostat (lfsa_argan) and (enps_lfsa_argaed)

Employment and gross value added by sector

The structure of an economy can be assessed by analysing the contributions of key sectors to total gross value added (GVA) and total employment. GVA represents the value that producers have added to goods and services and is widely used as an indicator of economic productivity. For this analysis, total employment refers to the working population aged 15 and over. Comparing a sector’s share of total GVA to its share of total employment offers insights into relative labour productivity across the economy. When a sector’s contribution to GVA exceeds its share of employment, it may indicate higher-than-average productivity relative to the overall economy.

Figure 4 shows that, as in the EU, employment in the ENP-South countries in 2023 was predominantly concentrated in the ‘Services’ sector.

Across the ENP-South countries, notable contrasts emerge within individual sectors. In Agriculture, Morocco recorded the highest employment share (31.2 %), while the sector’s contribution to GVA was significantly lower (12.3%), reflecting limited productivity relative to labour input. In Industry, Algeria stood out with a notably high productivity level: although the sector employed 2.9% of the workforce, it contributed a substantial 26.3% to Gross Value Added (GVA), reflecting strong output relative to employment. The construction sector showed its sharpest imbalance in Palestine, where it accounted for 20.9% of employment but only 4.2% of GVA. Conversely, the services sector was most prominent in Israel, engaging 83.5 % of the employed population and contributing 80.2 % to GVA, the highest shares in the ENP-South region, while Lebanon, though less prominent, showed the most balanced distribution, with 73.8% of employment and 70.7% of GVA in services.

The EU displays a strong dominance of the ‘Services’ sector, employing 72.0% of the active population and contributing 72.3% to Gross Value Added (GVA). The remaining sectors show smaller but noteworthy disparities between employment and GVA: industry contributes 20.3% to GVA versus 17.4 % employment (+2.9 pp), construction 5.6 % GVA against 6.8% employment (–1.2 pp), and agriculture, forestry and fisheries 1.8% GVA compared with 3.5 % employment (–1.7 pp), placing it below the average in terms of productivity.

Data for Jordan and Libya are not available.

Combined chart, showing the shares of the main economic sectors 'Agriculture, forestry and fisheries', 'Industry', 'Construction' and 'Services' in total employment and gross value added of the non-financial economy. Bars represent the respective sectors' shares of employment and points mark their shares of GVA. Data for 2023 or the most recent available reference year are presented for the EU, Algeria, Egypt, Israel, Lebanon, Morocco, Palestine and Tunisia. Recent data for Jordan and Libya are not available.
Figure 4: Employment and gross value added by sector, 2023
(% of population 15+ years old; % of total GVA)
Source: Eurostat (nama_10_a10), (lfsa_egan2), (enps_nama_10_a10) and (enps_lfsa_act)

Gross fixed capital formation

Gross fixed capital formation (GFCF) indicates how much the value added in an economy is invested rather than consumed. It is considered an indicator of future business activity. In general, GFCF tends to increase in times of economic growth and business confidence. Conversely, it tends to decrease in case of economic uncertainty or recession.

Figure 5 presents Gross Fixed Capital Formation (GFCF) as a percentage of GDP for the ENP-South countries and the EU over the period 2013-2023. In 2013, GFCF levels in most ENP-South countries were close to the EU average (19.6%), ranging from 21.9% in Tunisia to 27.0% in Lebanon. Israel, Palestine, and Jordan also recorded similar ratios, at 22.6%, 22.6%, and 22.4% respectively. Libya reported the lowest GFCF-to-GDP ratio at 16.8%, while Algeria recorded the highest at 35.6%.

Over time, the ratio of GFCF to GDP tends to fluctuate in most countries. The ratio may be influenced by disruptions such as local political events, conflicts and disasters, which may have short-term effects on GDP, but also longer-term effects on GFCF due to instability that affects security of investments and expectations of economic growth. For economies where the petroleum industry plays an important role, international events that influence current oil and gas prices and expectations for future prices trends may also be of importance. Several of the ENP-South countries, albeit not all, saw substantial falls in 2020 in connection with the Covid-19 pandemic and the associated economic effects of lockdowns, restrictions on international travel and tourism, as well as lower international demand for petroleum products.

Over the period 2013-2023, the ratio of GFCF to GDP remained relatively stable in Palestine, Morocco, Israel, and Jordan. In Algeria, the share increased from 35.6% in 2013 to a peak of 43.4% in 2016, before declining to 30.4% in 2022 and recovering slightly to 32.9% in 2023. On average, Algeria’s GFCF share stood at 38.2%, with fluctuations ranging from 5.2 pp above to 7.8 points below the average.

In Libya, the period of stabilisation following the 2011 civil war ended mid-2014 with renewed conflict. Despite this, the GFCF-to-GDP ratio remained relatively steady between 2013 and 2019, fluctuating between 15.8% (2019) and 19.4% (2016), with a notable outlier at 23.2% in 2014.

Lebanon experienced greater volatility. From 2013 to 2018, the ratio declined moderately from 27.0% to 21.8%. In 2019, it dropped sharply to 13.6%, reflecting the onset of the economic and financial crisis. Further disruptions — including the Covid-19 pandemic and the 2020 Beirut port explosion-pushed the ratio down to 12.5% in 2020. A partial rebound to 20.6% in 2021 was largely driven by a sharp contraction in GDP (–23.5%).

In Tunisia, GFCF declined gradually from 21.9% in 2013 to 19.4% in 2019, with a temporary uptick in 2015. The ratio then declined abruptly to 16.0% in 2020 and remained at that level through 2023.

In the EU, GFCF as a share of GDP was relatively stable throughout the period, ranging between 19.6% (2013 and 2014) and 22.0% (2019).

line chart showing the development in gross fixed capital formation as share of GDP in the EU and the ENP-South countries Algeria, Israel, Jordan, Lebanon, Libya, Morocco, Palestine and Tunisia for the years 2013 to 2023.
Figure 5: Gross fixed capital formation, 2013-2023
(% of GDP)
Source: Eurostat (nama_10_gdp) and (enps_nama_10_gdp_ea)

External balance of trade in goods and services

The external balance of trade in goods and services is the difference between exports and imports of goods and services. This balance is important for sustainable GDP growth. Measured as a share of GDP, it is an expression of the openness of the economy and its dependence on international trade. Figure 6 presents the external balance of trade in goods and services in the EU and in the ENP-South countries for the years 2018 and 2023.

The balance of international trade in goods expressed as a percentage of GDP, reflects the difference between exports and imports of goods relative to the total value added in the economy during the reference period. Among the ENP-South partner countries, developments were more varied. Algeria moved from a trade in goods deficit of -2.9% in 2018 to a surplus of 4.4% in 2023. Tunisia also reduced its deficit over the period, from -15.4% to -9.8%, and Israel recorded a smaller deficit in 2023 (-3.9%) compared with 2018 (-4.5%). In contrast, several countries experienced widening trade in goods deficits. Lebanon’s trade balance declined from -29.4% to -48.8%, and Palestine’s from -34.1% to -46.0%. Libya reported a significant surplus of 21.3% in 2018; data for 2023 are not available. Overall, the data point to differing trends across countries, with some showing improvements in their trade in goods balances as a share of GDP, while others saw further deterioration between 2018 and 2023.

In 2018, international trade in services across ENP-South countries reflected noteworthy differences in balance performance. Israel, Lebanon, and Tunisia recorded surpluses, with exports exceeding imports. Algeria, Libya, and Palestine reported deficits, indicating a greater reliance on imported services. These differences point to varying economic structures and degrees of integration into the international services economy across the region. Expressed as a percentage of the countries’ GDP, it provides an indication of both the internal demand for services and the economy’s reliance on the services sector, relative to the value added during the reference period.

By 2023, most ENP-South countries with available data had improved their trade in services balance. Israel’s surplus rose from 5.3% to 7.6% of GDP, while Tunisia’s increased from 2.5% to a provisional 4.2%. Algeria narrowed its deficit from –2.7% to –0.9%, and Palestine’s remained broadly unchanged at around –2.1% of GDP. Lebanon, however, saw a decline in its surplus, with service exports dropping from 2.6% to 1.4%. These shifts underscore ongoing changes in service sector performance and external demand dynamics across the region. For the EU, both trade balances saw a modest decline between 2018 and 2023: the goods surplus decreased from 1.9% to 1.5% of GDP, and the services surplus from 1.2% to 0.9%.

bar chart showing the balances between exports and imports of goods and services, respectively, for the EU and the ENP-South countries Algeria, Israel, Lebanon, Libya, Palestine and Tunisia for the years 2018 and 2023. The bars show the surplus or deficit in trade of goods and services, respectively, for each country, for each of the two reference years.
Figure 6: External balance of goods and services, 2018 and 2023
(% of GDP)
Source: Eurostat (bop_gdp6_q) and (enps_nama_gdp_ext)

Foreign direct investment balance

Foreign direct investment (FDI) represents a lasting interest in an enterprise operating in another economy and implies the existence of a long-term relationship between the direct investor and the recipient enterprise. It forms a part of the financial account of the balance of payments.

Foreign direct investment refers to direct investment equity flows in the reporting economy. It is the sum of equity capital, reinvestment of earnings, and other capital. Foreign direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy. Ownership of 10 percent or more of the ordinary shares of voting stock is the criterion for determining the existence of a direct investment relationship.

Inflows represent flows of investment into the economy; outflows represent flows of investment by the economy to the rest of the world. Negative values represent a reduction in the value of FDI in the economy; this may reflect transfer of ownership from foreign to domestic investors, revaluation of investments or other disinvestments. Countries that attract considerable inward investment are often themselves investors in other countries. The balance of inward and outward FDI flows is shown in Figure 7. As FDI may reflect large investments in specific projects within a limited timeframe, data values can vary greatly from one year to another. Data for Egypt, Jordan, Libya, and Palestine are not available.

Over the period 2013-2023, Israel was by far the ENP-South country with the largest net FDI flows into its economy, also reflecting its status as the largest economy among these countries. However, the net balance of FDI flows fluctuated considerably year-on-year, with net FDI inflows at €5.8 billion in 2013, before falling year-on-year and turning into a net outflow of -€2.5 billion in 2016, and starting a cycle where net FDI inflows rose and declined year-on-year between €7-8 billion in 2017, 2019, 2021 and 2023 and €12-15 billion in 2018, 2020 and 2022.

Except Israel, Algeria was the only other ENP-South country to record a negative FDI balance during the period (–€620 million in 2015), while attracting positive net inflows in most years. Its performance remained modest and volatile overall, with annual flows ranging from €20 million in 2022 to a high of €1.4 billion in 2016.

In recent years, Algeria has suffered from a massive drop in FDI projects and has yet to fully recover. While most of the ENP-South countries suffered a drop in project numbers during the Covid-19 pandemic, they mounted a comeback in 2022. Algeria, however, still has not returned to its pre-Covid heights. Algeria struggles to attract Foreign Direct Investment (FDI) due to a combination of factors including a difficult business climate, inconsistent regulations, and protectionist policies.

Lebanon recorded relatively steady and modest FDI inflows over the period, generally ranging between €1.2 and €1.6 billion annually from 2014 to 2021. The peak occurred in 2021 with €1.638 billion, suggesting resilience despite mounting political and economic challenges. However, inflows dropped sharply in 2022 to €439 million and remained low in 2023 (€539 million).

Morocco experienced stronger but more variable FDI inflows during the period. From 2013 to 2015, inflows consistently exceeded €2 billion, peaking at €2.394 billion in 2014. Although levels remained solid through 2018, a notable decline followed in 2019 (€739 million). After a partial recovery in 2022 (€1.54 billion), inflows dropped sharply to €239 million in 2023 (estimated data), suggesting renewed investor caution.

The EU FDI flows fluctuated strongly between net inflows and net outflows over the period 2013-2023. The highest net FDI inflows in this period were €122.0 billion in 2020, whereas high net FDI outflows were recorded in 2021 (-€424.7 billion), 2022 (-€272.0 billion), 2015 (-€166.6 billion) and 2017 (-€102.3 billion).

line chart showing the net balance of foreign direct investment flows in euro millions in the EU and the ENP-South countries Algeria, Israel, Lebanon, Morocco and Tunisia from 2013 to 2023.
Figure 7: Foreign direct investment balance, net flows, 2013-2023
(€ million)
Source: Eurostat (bop_fdi6_flow), (nama_10_gdp) and (enps_bop_fdi6)

Persons employed by public and private sector

Figure 8 presents the distribution of employment between the public (general government) and the private sector in the ENP-South countries, compared with the EU. The general government sector includes the central government, state government, local government and social security funds. Data refer to 2023, except for Morocco (2021 data), Lebanon and Tunisia (2022 data) and Algeria (2019 data). Data for Egypt, Jordan and Libya are not available.

Among the ENP-South countries, there is a certain difference in the labour market structure. Employment in Morocco was heavily concentrated in the private sector, with 90.8% of persons employed working in the private sector and only 9.2% in the public sector (2021 data). In most of the other ENP-South countries the public sector accounted for between 17% and 25% of employment, with Palestine at 16.6%, Lebanon at 17.0%, Tunisia at 22.8% (2022 data) and Israel at 25.4%.

Algeria stood out with the largest public sector share in total employment, 37.8% of persons employed (2019 data), with the private sector accounting for 62.2%.

In the EU, the share of the public sector (defined as sections O-Q of NACE Rev.2) for total employment was 25.9 % in 2023.

stapled bar chart to 100 per cent, showing the share of persons employed in the private sector and the public sector in the ENP-South countries Algeria, Israel, Lebanon, Morocco, Palestine, Tunisia and the EU for the year 2023.
Figure 8: Persons employed by the public and private sector, 2023
(% of total persons employed aged 20-64)
Source: Eurostat (lfsa_egan2) and (enps_lfsa_ppsec)

Source data for tables and graphs

Data sources

The data for ENP-South countries are supplied by and under the responsibility of the national statistical authorities of each country on a voluntary basis. The data result from an annual data collection cycle that has been established by Eurostat. These statistics are available free-of-charge on Eurostat's website, together with a range of different indicators covering most socio-economic areas.

The European system of national and regional accounts (ESA) provides the methodology for national accounts in the EU. The national accounts data presented in this article for ENP-South countries were generally collected under the international System for National Accounts (SNA). The structure of ESA 2010 is consistent with the international guidelines on national accounting set out in 2008 SNA.

The gross domestic product (GDP) is the central measure of national accounts, which summarises the economic position of a country (or region). It can be calculated using different approaches: the output approach; the expenditure approach; and the income approach. The main aggregates of national accounts are compiled from institutional units, namely non-financial or financial corporations, general government, households, and non-profit institutions serving households (NPISH).

Balance of Payments (BoP) statistics is the central source for data on balance of trade in goods and services and on foreign direct investment (FDI) transactions. BoP statistics are internationally compiled based on the methodology recommended by the International Monetary Fund (IMF) Manuals on Balance of Payments and International Investment Position. For the reference period the methodological framework prevailed in external sector statistics was set up in the IMF’s Balance of Payments and International Investment Position Manual Sixth Edition (BPM6). Some countries still apply the previous edition, BPM5.

Finally, the definitions of employment and the labour market used are based on international recommendations by the International Labour Organization (ILO).

In the dedicated data collection for ENP-South, the employment and labour market indicators are defined in line with the recommendations and standards published by the ILO.

For the EU, the definitions are based on the ILO recommendations and are applied in practice via the European Union Labour Force Survey (LFS).

Context

Indicators derived from national accounts provide a picture of the economic situation; they are widely used for analysis and forecasting, and provide the framework for government policy decisions. Foreign direct investment statistics provide a measure of the attractiveness of a country as an investment destination.

The use of internationally accepted concepts and definitions permits an analysis of different economies, such as the interdependencies between the economies of the EU Member States, or a comparison between the EU and non-member countries.

Within the EU, multilateral economic surveillance was introduced through the stability and growth pact, which provides for the coordination of fiscal policies. Economic and financial statistics have become one of the cornerstones of governance at a global and European level, for example, to analyse national economies during the global financial and economic crisis, economic recovery after the Covid-19 pandemic or to put in place EU initiatives such as the European semester, designed to promote discussions concerning economic and budgetary priorities, or the macroeconomic imbalance procedures (MIP).

The European Neighbourhood Policy (ENP), launched in 2003 and developed throughout 2004, supports and fosters stability, security and prosperity in the EU’s neighbourhood. The ENP was revised in 2015. The main principles of the revised policy are a tailored approach to partner countries; flexibility; joint ownership; greater involvement of EU member states and shared responsibility. The ENP aims to deepen engagement with civil society and social partners. It offers partner countries greater access to the EU's market and regulatory framework, standards and internal agencies and programmes.

The Joint Communication on Renewed Partnership with the Southern Neighbourhood – A new Agenda for the Mediterranean, accompanied by an Economic and Investment Plan for the Southern neighbours, of 9 February 2021 further guides cooperation with the ENP-South countries.

In cooperation with its ENP partners, Eurostat has the responsibility to promote and implement the use of European and internationally recognised standards and methodology for the production of statistics, necessary for designing and monitoring policies in various areas. Eurostat manages and coordinates EU efforts to increase the capacity of the ENP countries to develop, produce and disseminate good quality data according to European and international standards. Additional information on the policy context of the ENP is provided on the website of Directorate-General for the Middle East, North Africa and the Gulf (DG MENA).

The EU has been supporting statistical capacity building in the region for a number of years, among others by providing technical assistance to national statistical authorities and by sharing best practice and transferring know-how. A key tool for this statistical cooperation is the MEDSTAT programme a multiannual regional cooperation programme for statistics addressing common issues and requirements.

Footnotes

  1. This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue.

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