A key indicator of household material welfare, Actual Individual Consumption (AIC) per capita, reveals significant variations across Europe. Expressed in Purchasing Power Standards (PPS), AIC measures all goods and services used by households, whether purchased directly or provided by the government or nonprofit organizations. As a result, it offers valuable insight into living standards across the continent.
In 2023, Luxembourg ranked at the top of the list, with AIC per capita 36% above the EU average, at 136% of the EU’s benchmark. In contrast, Bulgaria and Hungary recorded some of the lowest material welfare levels in the European Union, with AIC per capita at just 70% of the EU average. The overall EU average, which encompasses 27 member states, is set at 100.
Nine EU countries recorded AIC levels above the EU average. In addition to Luxembourg, these countries include Germany (119%), the Netherlands (119%), Austria (114%), Belgium (113%), Denmark (108%), France (106%), Sweden (106%), and Finland (105%). Among the EU’s largest economies, Germany and the Netherlands performed the best, followed by France, where welfare was 6% above the EU average. Meanwhile, Italy’s material welfare matched the EU average, and Spain, at 91%, ranked the lowest among the “Big Four.”
On the opposite end of the spectrum, Central and Eastern European countries, along with several EU candidate nations, generally reported lower AIC per capita. Latvia, Estonia, Croatia, and Slovakia follow Hungary and Bulgaria in showing more than 20% lower material welfare than the EU average.
Outside the EU, the European Free Trade Association (EFTA) countries reported higher material welfare levels than the EU. Norway and Switzerland exceeded the EU average, with Norway at 24% above and Switzerland 16% higher. In contrast, all six EU candidate countries fell below the EU average, with Turkey, at 84%, performing better than nine EU countries, including Poland (83%) and Greece (80%).
While Nordic and Western European nations consistently show higher AIC per capita, reflecting better material welfare, Central and Eastern Europe, along with EU candidate countries, exhibit lower AIC figures. This disparity highlights notable regional differences in living standards across Europe.
Over the past three years, several countries experienced shifts in material welfare. Denmark saw the most significant decline, dropping from 120% of the EU average in 2020 to 108% in 2023. Meanwhile, Ireland, Bulgaria, and Spain reported significant increases in AIC per capita, with Turkey recording the most substantial rise among EU candidates, moving from 64% to 84%.
Eurostat explains that AIC is a comprehensive measure of household material well-being, accounting for all household expenditures, including those for food, clothing, housing, and healthcare. This indicator offers a more equitable way to compare living standards across different regions and countries, adjusting for variations in price levels.
