Consumption of the average Serbian household in 2019 is half lower than consumption in the EU, according to data from Eurostat, the EU’s statistical agency, according to which gross domestic product per capita (at purchasing power parity that takes into account price differences between countries) even further from the EU average and was only 41 percent.
According to both indicators, we are at the bottom of the table of European countries, and only ahead of Bosnia and Herzegovina, Albania and Northern Macedonia.
Individual consumption is a measure of the material wealth of households, according to a Eurostat statement, while GDP per capita is a measure of economic activity. Although far from the average, and even from the poorest EU countries, this 49 percent is a slight improvement compared to the previous three years when we were at 48 percent of the European Union average.
Since 2008, we were closest to the average EU consumption in 2012, when the average consumption of our household was exactly half of the EU consumption.
GDP per capita in relation to the European one increased last year and in fact returned to the level from 2013, when it amounted to 41% of the European Union average. Although modest, it is our best result in the last 12 years since these statistics have been monitored.
The fact that our consumption is at 49% of the EU average indicates the structure of consumption, says Jelena Zarkovic, a professor at the Faculty of Economics in Belgrade.
– It can be concluded that the inhabitants of the EU spend more on luxury goods, and we spend more on basic necessities of life such as food, drink, clothes, housing. However, I think that income is a better indicator of consumption as a measure of well-being. For example, unlike the EU, 20% of our workforce works in the informal sector. Also, in our country, there is still natural consumption, that is, people produce for themselves, which is also much less in the EU – notes Zarkovic.
Last year, Serbia recorded a GDP growth of 4.2 percent, while the EU grew at a rate of 1.5 percent. If ambitious plans were realized for our economy to grow faster than the European average in the coming years, it would be logical to assume that the differences in the standard would be reduced. However, Zarkovic points out that it is not only about growth but also the distribution of income.
– If that GDP growth goes towards a better part of the society, then it does not have to reflect to the same extent on the growth of standards and consumption. If growth goes to new jobs and employment of the poorer part of the population, then it is better for the growth of the overall standard of society. He adds that analyzes have appeared based on the Household Budget Survey, according to which the Gini coefficient, ie the measure of income inequality in one country, is growing, which indicates the growth of inequality – she says, Srbija Danas reports.
