Wealth in Central and Eastern Europe on the upswing

GfK study shows purchasing power in 40 European countries

Nuremberg, November 13, 2007 – In several regions of Central and Eastern Europe, people are wealthier than their Western European neighbors. For instance, Budapest’s inhabitants have more money than those of Freienbessingen in the German state of Thuringia. In the Baltic capital cities, the residents also have more disposable income than those of Italy’s weakest community. However, in a country comparison, the new EU member states are still lagging behind. These are some of the findings of the "GfK Purchasing Power Europe 2007/2008" study.

According to the findings of the GfK survey, European consumers have a total of around 8,000 billion euros to spend from their household net income. This corresponds to an average purchasing power, or disposable income, of around 11,998 euros per capita across the 40 countries surveyed. This figure includes state payments such as unemployment benefit, child support allowance and pensions.

With an average purchasing power of 27,521 euros in Switzerland and Liechtenstein and 27,395 euros in Luxembourg, these three countries are still Europe’s oases of affluence. With 18,055 euros in disposable annual income, Germany ranks in 10th place, behind Austria and France. Moldova has the lowest purchasing power with a per capita average of 685 euros per annum, corresponding to just a fortieth of the purchasing power of Swiss citizens.

The booming Emerald Isle

Ireland is currently recording the strongest growth in Western Europe. Since 2003, purchasing power has risen by around 30%. Over the same period of time, German purchasing power has risen by around 9%, a figure achieved in Ireland over the past year alone. In the purchasing power rankings, the Emerald Isle has gone from being in sixth place in the previous year to fourth place this year, recording per capita income of 22,207 euros. In County Dublin, the 506,211 residents earn an average 23,680 euros per annum. By way of comparison, the citizens of Hamburg have purchasing power of around one-fifth less with 19,225 euros and the average "Berliner" has approximately 30% less a year with just 16,508 euros. Stuttgart and Düsseldorf, with a per capita purchasing power of 20,499 euros and 21,755 euros respectively, also lag well behind Dublin. Residents of the Irish capital, however, are trumped by Munich’s population, which earn an average 24,674 euros annually.

Remarkable growth rates in Central and Eastern Europe 

Latvia’s purchasing power has improved, moving up four places in the purchasing power ranking and the country is now in 25th place. Similarly, it’s Baltic neighbors Estonia, Lithuania and also Serbia-Montenegro have all climbed up the rankings. 

Nothing has changed at the bottom of the purchasing power table, but per capita purchasing power is also developing positively in the low income countries. For example, since last year purchasing power in the Ukraine has increased by approximately 26%, more than in any other country. In 2007, Ukrainians have around 300 euros more disposable income than in 2006. Slovenia, the most affluent of the countries to join the EU in 2004, shows a purchasing power level which is only about 1,000 euros beneath that of Portugal, whose average yearly income per capita is 9,674 euros. 

Reversal of the East-West gap

Residents of all 23 districts of Hungary’s capital city, Budapest, have more money per capita than the population of the municipality of Freienbessingen in the German state of Thuringia, for example. The residents in the Lithuanian capital city are also 500 euros better off this year than the residents of Freienbessingen. In Hungary, residents of the town of Heviz, the most prosperous municipality on Lake Balaton, have a per capita purchasing power of 7,762 euros, which is over 40% above the national average and considerably higher than that of poorer municipalities in France, for example in the third arrondissement of Marseille. 

Furthermore, in the capital cities of the Baltic states, purchasing power is above the national average - in Vilnius, Lithuania, by almost 30% and in Riga, Latvia, by around 25%. Residents here have more money than those of Agerola, the Italian municipality with the weakest purchasing power, which is almost two thirds below the national average.  

Neighboring areas often showing strong contrasts

The purchasing power gap between various locations or regions of the countries of Central and Eastern Europe is often significant. For example, the population of Bratislava, Slovakia’s richest municipality has almost twice as much money as the inhabitants of Bucharest, Romania’s wealthiest municipality.

Similar occurrences may even be observed in a single country. For example, in the UK, residents of the most affluent district, City of London, have on average 10,000 euros more than the second most affluent district, Kensington and Chelsea: The 9,200 residents of the City of London have a per capita purchasing power of 48,456 euros compared with "just" 38,426 euros per annum for the 196,000 residents of Kensington and Chelsea.

The survey

The study "GfK Purchasing Power Europe" is conducted every year and covers 40 European countries. Calculations differentiate down to municipal level and zip code areas. The purchasing power determined represents the net annual income including state benefits. The 2007/2008 survey will be available from the end of November, updated in terms of data and regions. The GfK Purchasing Power Europe is used internationally for sales and expansion planning, branch optimization and financial controlling.

Graphics download
High-resolution charts and further illustrations can be downloaded at http://www.gfk-geomarketing.com/pp_europe.zip 

Further information: Cornelia Lichtner, GfK GeoMarketing,
tel. +49 7251 9295-270, c.lichtner@gfk-geomarketing.com

The GfK Group

The GfK Group is the No. 5 market research organization worldwide. Its activities cover five business divisions Custom Research, Retail and Technology, Consumer Tracking, Media and HealthCare. The Group has 115 companies covering over 90 countries. Of a total of approximately 8,400 employees, 80% (as at June 30, 2007) are based outside Germany. For further information, visit our website: www.gfk.com

Responsible under press legislation
GfK AG, Corporate Communications
Marion Eisenblätter
Nordwestring 101
D-90319 Nuremberg
Tel.  +49 911 395-2645
Fax  +49 911 395-4041
public.relations@gfk.com 

back

Wealth in Central and Eastern Europe on the upswing

 English Version (with chart)