Romania is a regional leader in terms of actual individual consumption (AIC) per capita, in purchasing power standards (pps, adjusted to prices), an indicator widely used to evaluate the material well-being of households.
This occurrence is a result of the increase in household consumption in Romania, closer to the EU average in the post-pandemic years, while the indicator in the region deteriorated, with the exception of Hungary, where it increased marginally while being more than 10pp lower.
Subsequently, the actual individual consumption per capita in Romania registered an increase of 5pp of the EU average in the period 2020-2023, reaching 86%.
In the same interval, this indicator has deteriorated in the Czech Republic and Poland, according to an analysis by Euronews Business. In Poland it fell from 86% of the EU average in 2020 to 83% in 2023, and in the Czech Republic from 90% to 81% – the second steepest decline at European level. Only in Hungary it increased slightly, from 69% to 70%.
In 2023, actual individual consumption per capita, expressed in purchasing power standards (PPS), ranged from 70% of the EU average in Bulgaria and Hungary to 136% in Luxembourg.
Note: Household spending refers to the final consumption expenditure incurred by the population to satisfy their daily needs and wants. These expenses include various categories such as food, clothing, housing (including rent), energy, transportation, durable goods such as cars, medical services, leisure activities and other miscellaneous services. For example, in 2023, total household spending in the EU represented 52.1% of GDP. Actual individual consumption also includes spending by government and nonprofit institutions that serve households.
Nine countries, above the EU average
Nine countries registered an AIC per capita above the EU average. In addition to Luxembourg, these included Germany (119%), the Netherlands (119%), Austria (114%), Belgium (113%), Denmark (108%), France (106%), Sweden (106%) and Finland (105%).
Out of the EU’s ‘Big Four’, Germany performed best, sharing second place with the Netherlands. In France, the material well-being of households was 6% above the EU average. Italy was at the level of the EU average, while Spain recorded the lowest well-being, 9 pp below the EU average.
At the lower end of the EU, Latvia, Estonia, Croatia and Slovakia followed Bulgaria and Hungary, with household material well-being more than 20 pp below the EU average.
Candidate countries are below the EU average
All four EFTA countries (European Free Trade Association: Norway, Iceland, Liechtenstein and Switzerland) reported material well-being higher than the EU average. Norway exceeded the EU average by 24%, while Switzerland was 16% above it.
AIC per capita was below the EU average in all six EU candidate countries, namely in Albania, Bosnia and Herzegovina, Montenegro, Serbia, North Macedoania and Kosovo.
This figure was below 50 pp in North Macedonia, Bosnia and Herzegovina and Albania.
Turkey surpassed nine EU countries in terms of material well-being
Turkey represents a special case, household material well-being being 16 pp below the EU average, compared to 36 pp below the EU average in Montenegro, the second-best performing candidate country.
The material well-being of Turkish households, at 84% of the EU average, was higher than that of nine EU member states, including Poland (83%), the Czech Republic (81%) and Greece (80%).
Nordic and Western European countries have a significantly higher AIC per capita, reflecting higher material well-being. In contrast, Central and Eastern European nations, along with EU candidate countries, generally report a lower AIC per capita. This highlights a discrepancy in material well-being between regions, evidenced by differences in living standards.
Post-pandemic changes
After the Covid-19 pandemic, AIC per capita, relative to the EU average, has remained relatively stable in some countries, with minor changes in others. However, several countries experienced significant increases and decreases.
Among EU members, the most notable decrease was recorded in Denmark, where AIC fell from 120% in 2020 to 108% in 2023, followed by that of the Czech Republic (from 90% to 81%) and Finland (from 111% to 105%).
Countries that saw declines as well were Germany (from 124% to 119%) and France (from 110% to 106%).
Over the same period, the biggest increases within the EU were recorded by Ireland (from 87% to 99%), Bulgaria (from 62% to 70%) and Spain (from 83% to 91%). Upon including EFTA and candidate countries, Turkey saw the most significant increase, going up from 64% to 84%. The other five EU candidate countries also reported increases.
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