Filenews 22 December 2024 - by Theano Thiopoulou
The material well-being of households varies considerably between European Union countries and as a result the level of real individual consumption in some countries is noticeably above or significantly below the European average.
A report published by Eurostat entitled 'Household material welfare varies widely in the EU', covering 2023 data, shows that over the past three years, actual individual consumption (AIC) expressed in purchasing power standards has changed in most EU countries.
Essentially, however, the data show the wide disparities that exist in the EU in terms of real individual consumption. To illustrate, real individual consumption (AIC) is considered a measure of material well-being and refers to all goods and services actually consumed by households. It includes consumer goods and services purchased directly from households, as well as services provided by non-profit institutions and the Government for individual consumption (e.g. health and education services).
In international comparisons, the term is usually preferred over the narrower concept of household consumption.
Between 2021 and 2023, the level of the indicator increased in 15 EU countries, mainly Ireland (99% compared to 91% in 2021), Cyprus (100% vs 94% in 2021) and Malta (90% vs 85%).
Nine countries recorded AIC per capita above the EU-27 average (100%). Luxembourg (136%) recorded the highest level at 36% above the EU average, followed by the Netherlands (119%) and Germany (119%).
The lowest levels of real individual consumption per capita were recorded in Hungary (70%) and Bulgaria (70%), both 30% below the EU average), while Latvia (26% below).
The lowest levels of real individual consumption per capita were recorded in Hungary and Bulgaria (both 30% below the EU average) and Latvia (74%). In contrast, the level of the AIC index decreased in 11 EU countries. The largest decreases were recorded in Denmark (108% vs 2023 vs 122% in 20212), Sweden (106% vs 112%), Lithuania (88% vs 93%) and Czechia (81% vs 86%).
GDP per capita
The differences in GDP per capita in the EU Member States are quite large, while the average in the EU-27 is 100%. Luxembourg had the highest GDP per capita among the 36 countries included in this comparison. In particular, in 2023 it was well above the EU average (almost 2.4 times).
The gross GDP per capita in Luxembourg was 237% and this is partly explained by the fact that a large number of foreign residents are employed in the country and therefore contribute to the country's GDP.
The second high level of GDP per capita in Ireland (213%) can partly be explained by the presence of large multinational companies, Eurostat said. Belgium (118%), Germany (116%), Sweden (114%), Malta (107%) and Finland (105%) were among the EU countries with GDP per capita above the EU average. France (99%), Italy (98%), Cyprus (97%), Slovenia (92%), Spain (91%) and Czechia (90%) had a level of GDP per capita below 10% of the EU average. Lithuania (87%), Portugal (81%) and Estonia (80%) had GDP per capita between 10% and 20% below the EU average. The GDP per capita of Romania (78%), Poland (77%), Hungary (77%), Croatia (76%), Slovakia (70%) and Latvia (70%) was less than 30% below average. Greece (69%) and Bulgaria (64%) had GDP per capita below 40% of the European average.
Price levels in Europe
According to the Eurostat report, Luxembourg had the highest price level among EU countries, 51% above the EU average. Denmark, Ireland, Finland, Sweden and the Netherlands had price levels above 20% above the EU average. Belgium, Austria, France and Germany are among the countries with price levels above the EU average. Italy, Estonia, Cyprus, Malta and Spain had a price level less than 10% below the EU average, followed by Slovenia, Portugal, Czechia, Greece and Slovakia with less than 20% below the EU average.
Lithuania, Latvia and Croatia had price levels less than 30% below the EU average, followed by Hungary and Poland with price levels below 40% below this average.
Overview of the economy
Eurostat released its short-term indicators last week covering sectors such as the economy, environment, business, health and work.
In the third quarter of 2024, the EU economy remained on a solid growth path, with GDP maintaining a moderate expansion, unemployment at an all-time low and employment continuing to rise.
Looking at monthly business indicators, industrial production in October continued its monthly fluctuations and increased slightly, while September's production in services and retail trade in October showed signs of decline.
EU economic sentiment was broadly stable in November and remained at a similar level as of September 2023.
