World Footwear


Europeans have around 773 euros less in 2020 due to COVID-19

Nov 6, 2020 Europe
Europeans have around 773 euros less in 2020 due to COVID-19
The Germany-based market research company GfK has announced the results of the newly released study “GfK Purchasing Power Europe 2020”. This year, the study also includes the Corona Impact Index, which illustrates the impact of COVID-19 on European countries
Europeans have just under 9.5 trillion euros at their disposal in 2020. This corresponds to an average per capita purchasing power of 13 894 euros. Per capita purchasing power shows a nominal decline of almost 5.3% in 2020 compared to last year's revised value, which can be attributed, according to GfK, mainly to the spread of COVID-19 and economic impact of the pandemic.

The rankings show substantial differences between the studied countries with respect to the amount available to Europeans for food, living, services, energy, private pensions, insurance, vacation, mobility and consumer purchases. In fact, disposable net income among the 42 studied countries varies significantly. Liechtenstein, Switzerland and Luxembourg have the highest disposable net income, while Kosovo, Moldova and Ukraine have the lowest: as an example, Liechtensteiners with a per capita purchasing power of 64 240 euros have more than 37 times the average purchasing power of Ukrainians.

Liechtenstein per capital purchasing power far exceeds the values of the other countries and is more than 4.6 times the European average. Completing the top three of the purchasing power rankings are Switzerland with 41 998 euros per capita available for spending (more than three times the European average) and Luxembourg with a per capita purchasing power of 34 119 euros (more than 2.5 times the European average).

All other countries in the top ten also have significantly above-average per capita purchasing power, with at least 50% higher than the European average. Sixteen of the countries considered by the study have above-average per capita purchasing power, while twenty-six fall below the European average. Ukraine takes last place with a per capita purchasing power of 1 703 euros.

“GfK Purchasing Power Europe is a recognized benchmark in the market for calculating consumer potential and shows the regional distribution of disposable income among the population – between individual countries as well as between the various regions within a country. In the midst of the coronavirus pandemic, it is important for companies to know where purchasing power and regional potential is highest in order to be able to make the best possible use of resources. Purchasing power is an important benchmark for the economic strength of a given region, and helps companies make business decisions related to sales management and marketing as well as location planning and evaluation”, commented Markus Frank, from GfK.

Corona Impact Index

The Corona Impact Index shows the differences in loss of prosperity among private households as a result of the coronavirus crisis, thus facilitating both national and regional comparisons within Europe. In the purchasing power top ten, Liechtenstein and Switzerland top the rankings with the highest disposable net income per capita in Europe. They are also the two countries that have suffered least as a result of the crisis. The impact of the coronavirus in Liechtenstein is around 85% below the European average, while in Switzerland it is around 74% below the European average. Iceland and Norway, which occupy fourth and fifth places in the purchasing power rankings, fare less well in the Corona Impact Index and are 58% and 63% above the European average respectively. Both countries have been hit particularly hard by the coronavirus pandemic, one of the reasons being the devaluation of their national currencies against the euro. Occupying last place among the 42 countries in the rankings is Turkey, where the Corona Impact Index is more than 2.8 times the European average.  “The coronavirus crisis has had a significant effect on disposable net household income,” explains Markus Frank. “However, there are regional differences. The Corona Impact Index therefore provides companies with useful data that illustrate the “forecast gap”, in other words the gap between the potentially achievable growth path for disposable income of private households before the outbreak of COVID-19 in Europe and the now expected national purchasing power level according to the 2020 purchasing power forecast. This data makes it possible to identify the regions that have suffered most as a result of the crisis and those that have suffered least”, he concluded.

Image credits: Andrea Natali on Unsplash