You may wonder to know the richest and the poorest countries in Europe today, based on the worldpopulationreview.com ranking, the poorest European country is Ukraine with an annual GDP per capita of $3,727 while the richest country in Europe remains Monac0.
In this guide, we will be writing exclusively on the poorest European countries, you will learn about their economies and the steps the government is taking to reduce this rate.
21 Poorest European Countries By GDP 2023
1. Ukraine – $3,727
Ukraine’s economy is a developing mixed economy in Eastern Europe. Ukraine’s economy developed quickly from 2000 until the Great Recession hit the world in 2008. The economy began to improve in 2010, and this trend lasted through 2013.
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The Ukrainian economy collapsed in 2015, with GDP at just over 50% of its 2013 level. The economy picked up its pace of expansion again in 2016. The Ukrainian economy expanded fast from 2008 to 2018, expanding by about 80%.
Due to hyperinflation and a drop in economic output, Ukraine’s GDP in the 1990s was less than half of what it had been in the prior Ukrainian SSR. The first sign of economic expansion occurred in the year 2000 and persisted for the next eight years.
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The worldwide economic downturn of 2008 put an end to this expansion. Positive GDP growth was recorded for the first quarter of 2010 as the Ukrainian economy showed signs of recovery.
In the first decade of this century, Ukraine was hailed as having many of the makings of a big European economy, including fertile farmland, a robust industrial foundation, highly skilled labor, and a robust educational system.
Ukraine’s economy went into a recession in October 2013. There was a significant drop in Ukrainian shipments to Russia the previous summer as a result of increased Russian border and customs enforcement.
Russia’s annexation of Crimea in the early days of 2014 and the subsequent War in Donbas, which broke out in the spring of the same year, were devastating to the Ukrainian economy and two of the country’s most important industrial districts. Ukraine’s economy grew by nothing in 2013.
The GDP of Ukraine dropped by 6.8 percent in 2014, and a further 12 percent the following year. The World Bank said in April 2017 that the Ukrainian economy had grown by 2.3% in 2016, thus ending a recession. Despite these advancements, some journalists blame the country’s high level of corruption for Ukraine’s continued status as Europe’s poorest country.
2. Georgia – $4,279
Georgia has a vibrant, free-market economy that is just getting started. Its GDP collapsed after the fall of the Soviet Union but has since grown by double digits largely to the democratic and economic reforms instituted in the wake of the peaceful Rose Revolution in the mid-2000s.
Since 2003, when its economy was “almost bankrupt,” Georgia has continued to improve, “moving to a pretty well-functioning market economy in 2014.” The World Bank has repeatedly placed Georgia at the top of its ease of doing business index since naming the country the world’s top economic reformer in 2007.
The economy of Georgia benefits from the country’s relatively liberal and transparent environment. Compared to its neighbors and neighboring European Union states, Georgia ranks lowest in corruption in Transparency International’s 2018 study on the Black Sea region.
Georgia is the only country in its immediate area with a mixed news media environment and a free press.
The European Union (EU) has been Georgia’s largest trading partner, accounting for more than a quarter of Georgia’s total trade turnover since 2014 thanks to Georgia’s membership in the EU’s Free Trade Area.
In the year 2015, bilateral commerce increased significantly as a result of the EU trade accord, although it fell dramatically with the CIS.
3. Kosovo – $4,287
Kosovo is experiencing what is known as a “transition economy.” Before receiving federal development subsidies in the 1960s and 1970s, Kosovo[a] was the poorest province of the former Yugoslavia.
The province’s independent institutions were abolished in the 1990s, which was followed by weak economic policies, international sanctions, limited access to external commerce and finance, and ethnic violence.
The already fragile economy took a serious hit from these developments. Since declaring independence in 2008, Kosovo’s economy has increased annually, suffering somewhat from the worldwide recession.
Its future potential is hampered by a number of factors, many of which are connected to the fact that its position is hotly contested on the international stage. Serbia’s low government debt (much of which is still paid by the country) and strong banking system are two further possible advantages (despite remaining obstacles to using this for productive loans)
4. Moldova – $4,551
Despite the country’s impressive economic growth over the past two decades, Moldova is nevertheless one of Europe’s poorest nations. High growth and decreased poverty have resulted from a growth model dependent on remittance-induced spending, but this paradigm has grown less sustainable long before the latest series of crises.
Low productivity growth has resulted from a combination of a smaller and older population and a drop in remittances, and many low-income people have become reliant on pensions and government handouts as a result.
Shocks like the pandemic, the energy crisis, and most recently the refugee crisis brought on by Russia’s invasion of Ukraine have shown how fragile this development model is.
Because of its proximity to the conflict in Ukraine and its inherent weaknesses as a small, landlocked economy with tight links to both Ukraine and Russia, Moldova is one of the countries hit worst by the conflict.
More money has to be spent on the influx of refugees, which leaves less for long-term development priorities. If many migrants remain but are unable to find work, the big influx of refugees will pose a challenge to the economy in the longer term.
The country of Moldova is extremely dependent on imports to meet its food and energy needs, making it susceptible to disruptions in the supply of food, energy, and commodities imported from Ukraine and Russia. Moldova also continues to rely heavily on natural gas imports from Russia for meeting its energy demands.
It is anticipated that disruptions in imports will increase pricing pressures, reducing the competitiveness of businesses and the purchasing power of households, particularly the poor.
The Government, which has a strong mandate, parliamentary support, and trust among citizens and international partners, must find ways to mitigate the immediate economic impact while maintaining momentum on the long-term agenda, as economic activity continues to shrink due to shocks from the war in Ukraine and the ongoing impacts of the COVID-19 pandemic.
Short-term recovery measures must be accompanied by long-term reforms that will help move the economy away from the current economic model.
The European Council’s decision to recognize Moldova as an EU candidate country will provide a significant boost to these initiatives. The new 2023–2027 World Bank Country Partnership Framework for Moldova is intended to provide key elements to support the country in its efforts to transition to a new growth model, delivering targeted activities that respond to both the immediate crisis and address Moldova’s longer-term development agenda with the goal of advancing the agenda toward EU accession.
5. Albania – $5,215
Albania’s economy underwent a period of transition from a command economy to a free-market market economy.
Services account for a majority (54.1%) of Albania’s GDP, followed by agriculture (21.7%) and manufacturing (24.2%). Agriculture, food processing, lumber, oil, cement, chemicals, mining, basic metals, hydropower, tourism, the textile industry, petroleum extraction, and so on all contribute significantly to the economy, as do the country’s few natural resources.
The strongest industries include those dealing with energy, minerals, metals, food, and travel. The country’s main export industries are the textile and chrome industries.
The summer tourist season has become increasingly important to the national economy. More than $2.4 billion will be earned from tourism this year, thanks to the approximately 6.4 million visitors expected this year.
6. North Macedonia – $5,888
Since declaring independence from Yugoslavia in 1991, when the country lost access to vital protected markets and large transfer payments from Belgrade, North Macedonia’s economy has been more liberalized, with an improved business environment.
North Macedonia was the poorest republic in Yugoslavia when it gained independence, contributing just 5% of GDP. Up until 1996, economic expansion was stymied by a lack of infrastructure, UN sanctions against its major market (the Federal Republic of Yugoslavia), and a Greek economic blockade.
The subsequent choppy recovery period was mitigated by worker remittances and foreign help. Except for 2001, every year since then has seen a rise in GDP, the largest of which was a 5% increase in 2000. But the significant regional economic dislocations created by the Kosovo War stifled growth in 1999.
Because of prudent privatization in the year 2000, the country now has over $700 million in its treasury. The government has also shown its dedication to free trade, economic reform, and regional cooperation.
The economy is self-sufficient in terms of staple foods, coal, and hydropower, but it must import all of its petroleum and natural gas as well as the vast majority of its sophisticated machinery and parts. Even though the exchange rate was normalized when the EU Stabilization and Association Agreement went into effect in 2004, inflation has now dropped from its record high of 11% in 2000.
Comparable to countries like Romania and Poland, North Macedonia has one of Europe’s highest average growth rates at 4% (even during the political crisis).
7. Bosnia And Herzegovina – $6,032
Bosnia and Herzegovina’s economy is in transition, hence it’s considered to be of upper medium income. On March 1, 1992, Bosnia and Herzegovina declared its independence from Yugoslavia. Turkey, Germany, Italy, Austria, and the other Balkan countries nearby are the primary trading partners.
A lot has been accomplished in Bosnia and Herzegovina since the middle of the 1990s, and the country is now considered upper-middle income. In the midst of a time of poor growth and the global financial crisis, it is currently a potential EU candidate country and is implementing a new growth model.
In 2016, services contributed 55% of the GDP to Bosnia and Herzegovina’s modest, open economy. The industrial and manufacturing sectors accounted for 23% and 12% of GDP, respectively, while agriculture accounted for only approximately 6%.
The national currency, the konvertibilna marka (convertible mark or BAM), was adopted in 1998 and is pegged to the euro, which has helped boost public trust in the banking system and the currency. However, privatization implementation has been delayed, and local entities only grudgingly back national-level institutions.
In 2001, reforms were stepped up as more and more of the banking industry fell under the control of foreign institutions, mainly those based in Western Europe. The high unemployment rate and large current account deficit continue to be the most pressing economic issues.
A large quantity of humanitarian and reconstruction aid is provided by the international world, but the country must get ready for an era of diminishing aid.
The Country Commercial Guide is an annual report put out by the United States Embassy in Sarajevo, Bosnia, and Herzegovina. It provides a thorough examination of the country’s commercial and economic environment, including an analysis of the country’s economy, politics, and markets.
8. Belarus – $6,411
Pre-Revolutionary Belarus was a poor, agriculturally-dependent nation with a high concentration of its population in the countryside. Half of Belarus’s people were killed and much of the country’s infrastructure was destroyed during World War II. You can read this link to know about Belarus’s Economic Analysis.
Following World War II, Belarus underwent rapid industrialization and developed into a major transit point for goods traveling between the Soviet Union and Europe. Tractors, semis, heavy vehicles, oil processing, metal cutting lathes, synthetic fibers, televisions, semis, and microchips were all manufactured there and were an integral part of the country’s economy.
The majority of Belarus’s industrial workforce in the 1980s was employed by companies with more than 500 workers. When compared to other Soviet republics, it was the most technologically sophisticated and had the highest export rate of its products (at over 80%).
Belarus earned the moniker “the Soviet assembly shop” because of its function as a manufacturer of goods assembled from components imported from the Soviet Union.
Belarus, under Lukashenko’s leadership, has avoided the widespread privatizations that plagued other post-Soviet states in the years following the Soviet Union’s collapse.
9. Serbia – $7,666
Two-thirds of Serbia’s GDP comes from the tertiary sector, making it a service-based, upper-middle-class economy in Central Europe (GDP).
The free market system is the basis for the economy. In 2022, we anticipate a nominal GDP of $62.721 trillion, or $9,164 per person, and a PPP GDP of $164.835 trillion, or $24,084 per person.
Serbia’s economy is most robust in the areas of energy, automobiles, machinery, mining, and agriculture. Autos, basic metals, home furnishings, food processing equipment, machinery, chemicals, sugar, tires, apparel, and medicines are the country’s main industrial exports.
Serbia’s GDP is heavily dependent on international trade. Germany, Italy, Russia, China, and the surrounding Balkan countries make up the bulk of the country’s trade relations.
As the country’s administrative and financial center, Belgrade is where the majority of Serbia’s significant domestic and foreign corporations have their headquarters. After Belgrade, the most major economic centers are the cities of Novi Sad and Ni.
10. Montenegro – $7,686
The economy of Montenegro is in flux as the country deals with the aftereffects of the Yugoslav Wars, the fall of industry following the dissolution of the Socialist Federal Republic of Yugoslavia, and economic sanctions imposed by the United Nations.
On April 29th, 2012, Montenegro became a member of the World Trade Organization. On June 5, 2017, Montenegro became a member of the North Atlantic Treaty Organization. Montenegro is targeting the year 2025 for its EU membership entry.
11. Croatia – GDP Per capita $14,033
Currently, 60% of Croatia’s GDP comes from the tertiary sector, making it a developing high-income service-based economy (GDP).
In 2000, Croatia joined the World Trade Organization; in 2009, it joined NATO; and on July 1, 2013, it entered the European Union. Financial turmoil, coupled with sluggish progress on economic reforms, led to a cumulative 12.5% drop in GDP over six years and a recession in the Croatian economy.
The fourth quarter of 2014 marked the official end of the recession in Croatia, and the country has had consistent GDP growth ever since then. In 2019, the Croatian economy returned to its pre-crisis level; but, in 2020, the country’s GDP fell by 8.4 percent due to the Coronavirus pandemic. However, in 2021, Croatia had its largest GDP rise since 1991.
12. Romania – GDP Per capita $14,469
Located between Central Europe and Eastern Europe, Romania is a key link in the European transportation network. To the south is Bulgaria, to the north is Ukraine, to the west is Hungary, to the southwest is Serbia, to the east is Moldova, and to the southeast is the Black Sea.
About 19 million people live in its 238,397 square kilometers (92,046 square miles) and enjoy its mostly temperate-continental climate. There are more people living in Romania than in any other country in Europe.
Bucharest is the country’s capital and largest city, followed by Iași, Cluj-Napoca, Timișoara, Constanța, Craiova, Sibiu, Brașov, and Galați. The Danube, the second-longest river in Europe, begins in the Black Forest of Germany and flows southeast for 2,857 kilometers (1,775 miles) before it empties into the Danube Delta in Romania.
The Carpathian Mountains run the length of Romania from north to south, and their highest point, Moldoveanu Peak, is 2,544 meters above sea level (8,346 ft).
Evidence of human habitation in the area now known as Romania dates back to the Lower Paleolithic, and written records attest to the emergence of the Dacian kingdom, their conquest by the Romans, and their Latinization under Roman rule.
In 1859, the principalities of Moldavia and Wallachia in the Danube River valley formally united under a single monarch, forming the modern nation of Romania. After years of Ottoman rule, the new nation of Romania declared independence in 1877.
Romania declared its neutrality in 1914, but by 1916 it was fighting alongside the Allies. Bukovina, Bessarabia, Transylvania, and chunks of Banat, Crișana, and Maramureș all joined the Kingdom of Romania after the war.
As a result of the Molotov-Ribbentrop Pact and the Second Vienna Award, signed in June and August of 1940, Romania gave up Bessarabia and Northern Bukovina to the Soviet Union and Northern Transylvania to Hungary.
After signing the Tripartite Pact in November 1940, Romania immediately entered World War II on the Axis side in June 1941, fighting against the Soviet Union until August 1944, when it switched sides and recovered Northern Transylvania for the Allies.
Romania was occupied by the Soviet Union during World War II, and as a result, the country transformed into a socialist republic and joined the Warsaw Pact. Following its revolution in 1989, Romania began making the shift to democracy and a market economy.
13. Poland – GDP Per capita $15,304
In spite of a minor GDP drop of 2.2% in 2020, Poland’s well-diversified economy has proven to be one of the most resilient economies in the EU, recovering well in 2021. Long-term inclusive growth and poverty reduction have been facilitated by factors such as a stable macroeconomic environment, efficient use of European Union investment funds, a stable financial sector, improved access to long-term credit, and integration into European labor markets.
Private spending has been bolstered by rising real median and bottom 40 earnings and robust domestic labor markets. Policy space has shrunk as a result of the exceptional response to the COVID-19 crisis and excessive inflation.
Rebuilding fiscal buffers, accommodating more spending on health, military, and the green transition, and preparing for the growing fiscal burden stemming from aging all call for increased spending and tax expenditure efficiency.
The tighter labor supply will be a major obstacle during the next few years, especially as the population ages.
Large numbers of Ukrainian refugees may be able to ease labor market shortages. Another difficulty is meeting decarbonization targets. For growth to be both long-lasting and equitable, institutions must be fortified.
14. Hungary – GDP Per capita $15,372
According to the Economic Complexity Index, Hungary’s high-income mixed economy is the ninth most complicated in the world. A member of the OECD, Hungary has a high human development index and a skilled labor force, and its income inequality ranks the 13th lowest in the world.
Hungarian GDP is $265.037 billion every year, making it the 54th largest economy in the world (out of 188 nations measured by IMF), and the 41st largest in terms of GDP per capita when PPP is used.
Hungary is the world’s 35th largest export economy because of its market economy’s focus on international trade. In 2015, the country’s exports totaled more than $100 billion, resulting in a sizable trade surplus of $9.003 billion; the majority (79%) of these exports were sold within the European Union (EU), while 21% were sold outside of the EU.
The Hungarian welfare state is supported by a tax rate of 39.1 percent on personal income and 80.1 percent on corporate profits. Expenditures make up the bulk of GDP, with 50% coming from household consumption, followed by gross fixed capital formation at 22% and government expenditure at 20%.
Causes Of Poverty In Europe
Overall, the EU’s persistently high poverty rate suggests that poverty is essentially the result of how society is organized and resources are allocated, be they financial or other resources like housing, health and social services, education, and other economic, social, and cultural.
In terms of individuals, a number of important elements are seen to put them “at risk” of poverty.
There are a number of factors that can put someone at risk of poverty, including not having a job or having a job that doesn’t pay enough to live on and doesn’t provide enough security to feel safe leaving their house alone; not having the education or skills necessary to get a job that will allow them to grow and contribute to society; and finally, the size and composition of one’s family.
Because of factors such as lower labor force participation, poorer retirement savings, greater unpaid caregiving obligations, and lower wages even while performing equivalent work, women are more likely to live in poverty than males.
Living in a remote or economically disadvantaged community; having a disability or illness that makes it difficult to work and increases the cost of living; belonging to a racially or ethnically targeted minority group like the Roma or undocumented migrants, who face additional barriers to employment due to discrimination and racism.
What Is The Poorest Country In Europe?
The poorest country in Europe right now is Ukraine with an annual GDP per capita is $3,727.
What Is The Richest And The Poorest Country In The EU?
The richest and poorest country in Europe (EU) right now is Monaco and Ukraine respectively.
Is Spain A Poor Country In Europe?
Yes, this is because, with a GDP that is below the EU average, Spain is one of 17 of the EU’s 27 member states. In terms of GDP per capita, the Kingdom of Spain (covering an area of 505,944 square kilometers) is the tenth poorest member state of the European Union, with a PPS (purchasing power standard) GDP of 84.
Is the UK richer than France?
Yes! based on GDP per Capita and GDP per nominal, the United Kingdom is richer than France.
Is Spain richer than the UK?
No! The UK is far richer than Spain owing to the fact that the GDP per Capita and GDP per nominal of the United Kingdom are far above that of Spain.
Looking for the poorest European nation is what we have taken our lenses to focus on in this content. Most of these nations are plagued with corruption, political instability, bad leadership, and most importantly the results of world II and III respectively. So for today, that is all we have for you.