Household material welfare varies significantly across Europe, with countries showing substantial differences in living standards. Actual Individual Consumption (AIC) per capita, expressed in Purchasing Power Standards (PPS), provides a measurable indicator of these disparities.
According to Eurostat, AIC encompasses all goods and services used by households, regardless of whether they are directly purchased or funded by governments or nonprofits.
In 2023, AIC per capita ranged from 70% of the EU average in Bulgaria and Hungary to 136% in Luxembourg, with the EU average benchmarked at 100. This means Luxembourg’s material welfare was 36% above the EU average, while Bulgaria and Hungary were 30% below it.
Nine EU countries recorded AIC levels above the EU average. Leading the pack was Luxembourg, followed by Germany (119%) and the Netherlands (119%). Other high performers included Austria (114%), Belgium (113%), Denmark (108%), France (106%), Sweden (106%), and Finland (105%). Among the “Big Four,” Germany topped the list, while France was 6% above the EU average. Italy aligned with the EU average, and Spain lagged 9% behind.
EFTA countries surpassed the EU average, with Norway exceeding it by 24% and Switzerland by 16%.
At the other end, Bulgaria and Hungary posted the lowest AIC levels among EU countries. Latvia, Estonia, Croatia, and Slovakia followed closely, with material welfare over 20% below the EU average. Among EU candidate countries, Turkey stood out, with material welfare 16% below the EU average—significantly higher than Montenegro, the second-best candidate, which trailed by 36%.
While AIC remained stable in some regions over the last five years, notable shifts occurred elsewhere. Denmark experienced the steepest decline, dropping from 120% of the EU average in 2020 to 108% in 2023. Czechia, Finland, Germany, and France also saw reductions. Conversely, Ireland (87% to 99%), Bulgaria (62% to 70%), and Spain (83% to 91%) recorded the largest improvements.
Direct quotes, such as Eurostat’s definition of AIC, remain unchanged to maintain accuracy:
“AIC includes ‘all goods and services that households use, regardless of whether they were purchased and paid for directly by households, by the government, or by nonprofit organisations.'”
This detailed examination highlights the varied experiences of household material welfare across Europe, emphasizing the role of economic, social, and policy factors in shaping living standards.
