Economic indicators are to economists what symptoms are to doctors: signs of the relative well-being of the patient. Physical symptoms can indicate good health or, perhaps, the onset of disease, in which case specific treatment may be necessary. Similarly, economic indicators can help policmakers determine  whether or not treatment is needed. A hands-off approach to the economy would be ideal, but like most things in life, the economy has a tendency to break down or get into unhealthy, destructive spirals.

Europe’s economic diagnosis in the years after the financial crisis has been grim. With the threat of a Greek default and exit from the euro, it is evident the eurozone crisis is far from over. Yet, there are many hopeful signs as low oil prices, favorable foreign-exchange rates and a recent European Central Bank stimulus package are having positive influences on Europe’s recovery.  With future prospects looking up for the health and safety of the overall European economy, here are the European Union’s top five healthiest and safest economies.

Methodology

We examined all 28 of the EU member countries and ranked them based on a number of economic indicators. From the CIA World Fact Book, we gathered estimates of GDP per capita, GDP growth, and unemployment and inflation rates for 2014. We then took into account The Economist’s GDP growth forecasts for 2015. From these indicators, we determined the top five healthiest and safest E.U. economies in 2015 are:

1) Luxembourg

GDP per Capita: $92,400

GDP Growth Rate: 2.7%

Unemployment Rate: 7.1%

Inflation Rate: 0.8%

GDP Growth 2015 Forecast: 3.0% or higher

Boasting the highest GDP per capita in the E.U. at almost double next-highest Netherlands, Luxembourg maintained modest growth and a stable price level in 2014. Although it’s unemployment rate is somewhat high, it is poised for higher growth in 2015 and still has room for inflation to increase without getting out of hand.

 

2) Ireland

GDP per Capita: $46,800

GDP Growth Rate: 3.6%

Unemployment Rate: 11.3%

Inflation Rate: 0.3%

GDP Growth 2015 Forecast: 3.0% or higher

Although Ireland has one of the highest unemployment rates in the E.U., it exhibited the strongest growth rate and sits third in GDP per capita rankings. Price levels are extremely stable, and although an inflation rate of 0.3% could cause some worries of slipping into deflation, the strong growth forecast for 2015 should ward off any deflationary pressure.

 

3) United Kingdom

GDP per Capita: $37,700

GDP Growth Rate: 3.2%

Unemployment Rate: 5.7%

Inflation Rate: 1.6%

GDP Growth 2015 Forecast: 2.0% to 2.9%

Ranking third in the E.U. for GDP growth in 2014 and fourth for the lowest unemployment rate, the U.K. also boasts a modest GDP per capita. The U.K is looking pretty healthy with a stable price level and a relatively high level of growth for 2015 compared to the rest of the bloc.

 

4) Malta

GDP per Capita: $31,700

GDP Growth Rate: 2.2%

Unemployment Rate: 5.9%

Inflation Rate: 1.0%

GDP Growth 2015 Forecast: 3.0% or higher

With a stable price level and top five ranking in the E.U. for its relatively low unemployment rate, Malta is easily one of the healthiest and safest E.U. economies today. Although its GDP per capita is the lowest in our top five ranking it sits around the median compared to all EU countries and with modest growth last year and robust growth forecasted for 2015 Malta takes fourth spot in our rankings.

 

5) Denmark

GDP per Capita: $44,300

GDP Growth Rate: 1.5%

Unemployment Rate: 5.2%

Inflation Rate: 0.6%

GDP Growth 2015 Forecast: 1.0% to 1.9%

Despite having a GDP growth rate of only 1.5% and a similarly predicted growth forecast for 2015, Denmark’s low inflation rate leaves it room for expansionary policies that could lead to strong future growth. The Scandinavian nation is seventh among E.U. countries in GDP per capita and has the third lowest unemployment rate.

The Bottom Line

Although Europe has felt the economic ills of the financial contagion that plagued the global economy, the continent’s economies are gaining strength and beginning to return to good health. The five countries listed above look especially vibrant, and hopefully their recovery will be just as contagious.

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