In 2021, people in Europe will once again be able to spend more money on food, housing, services, energy costs, private pension provision, insurance, holidays, mobility and consumer desires. "After purchasing power stagnated last year due to the coronavirus pandemic, this year people can at least partially compensate for rising inflation with nominal purchasing power gains," explains Filip Vojtech, GfK retail expert in geomarketing. Purchasing power refers to disposable income excluding taxes, social security contributions and transfer benefits, and is shown per capita and year in euros as an index. 42 European countries were surveyed down to the postcode level in the ‘GfK Purchasing Power Europe 2021’ study.
But the purchasing power trend is not the same in every European country. "While the United Kingdom moves up two places and into the purchasing power ranking’s top 10 due to a stronger pound, neighbouring Ireland slips down three places," says Filip Vojtech. Unchanged and in the same order as last year, the top 10 after Liechtenstein are Switzerland, Luxembourg, Iceland, Norway, Denmark, Austria, Germany and Sweden. They all have very high per capita purchasing power, at least 55 per cent above the European average. For the United Kingdom, which just makes it into the top 10 for the first time this year, purchasing power is at €23,438 per capita.
But things have also changed within the countries. The GfK expert cites France as an example "where the purchasing power gap is widening".
At the bottom of the table is the district of Saint-Denis, north of Paris. Per capita purchasing power here averages €14,086, about 32 per cent below the national average. "The development of the regions with the highest and lowest purchasing power in France shows that the gap between rich and poor has been widening in recent years," say the editors of the study
In Hungary, the average per capita purchasing power is €7,643, which gives it just under 51 per cent of the average purchasing power in Europe. This puts Hungary in 30th place in the country comparison again this year.
Also unchanged from the previous year is the number of counties with above-average purchasing power: people have more money than the national average in just five of Hungary’s 20 counties. They are all geographically located in and around the capital Budapest and towards the Austrian border.
After the coronavirus crisis, per capita income has again recorded slight nominal growth of 1.9 per cent this year. However, how much consumers have at their disposal for spending and saving differs not just from country to country, but also within countries, sometimes very significantly. The order of the countries with the highest per capita purchasing power has remained largely constant. The only new ranking was where the United Kingdom (due to a stronger pound) just managed to slip into the purchasing power ranking’s top 10, in tenth place.