The latest data on purchasing power in Europe confirm what economists have long been warning: the gap between the wealthy north and west and the rest of the continent has never been more evident.
A map based on analyses by the Statista platform and economic indicators such as purchasing power parity (PPP), tracked by Eurostat and the OECD, reveals where people in Europe truly enjoy a high standard of living – and where wages barely cover basic costs.
Where does money really go further?
Northern European countries continue to rank at the top in terms of purchasing power. According to available data, Norway, Sweden, and Finland have indices above 120, while Denmark exceeds 130.
A similar picture can be seen in Germany (around 130) and the Netherlands, which combine high wages with relatively stable prices.
The absolute leaders are small but exceptionally wealthy economies. Luxembourg, with an index above 180, and Switzerland, with more than 160, according to OECD and World Bank analyses, enjoy standards of living far above the European average.
Economists highlight that these countries benefit from key advantages: high productivity, strong institutions, and stable labour markets, enabling real wage growth despite inflation.
The West is no longer what it used to be as living standards stagnate
Although still part of developed Europe, countries such as France (around 112) and the United Kingdom (124) are experiencing stagnation in purchasing power.
According to Eurostat, inflation in recent years has significantly eroded wage growth, particularly in energy and food.
In southern Europe, the situation is even more complex. Spain barely exceeds an index of 100, while Portugal, at around 60, illustrates how low real living standards can be even within the EU.
The OECD confirms this, warning that disparities within the EU are no longer merely geographical but also structural.
Eastern Europe is catching up – but slowly
Countries in Central and Eastern Europe are making progress, though not yet converging with the West.
The Czech Republic and Slovenia are approaching or exceeding an index of 100, while Poland, at around 94, shows steady growth, supported by World Bank data on GDP per capita (PPP).
Romania and Bulgaria still lag behind, but over the past decade, they have significantly narrowed the gap thanks to investment and rising wages.
However, as Eurostat warns, the gap in real living standards between eastern and western Europe remains substantial.
The Balkans: wage growth does not match real living standards
The Balkan region sits in the lower tier of Europe’s purchasing power rankings.
Although wages have risen nominally, data from national statistics offices and Eurostat show that rising prices – especially for food and housing – have significantly reduced the real impact of these increases.
Slovenia and Croatia stand out as relatively more stable, while other countries in the region remain in the lower standard-of-living bracket.
Serbia: lowest purchasing power in the region
According to the map and available data, Serbia ranks at the very bottom of the region, with an index of around 60 – below most neighbouring countries.
This means that Serbian citizens can buy significantly less for the same amount of money than people in most of Europe, and even less than in neighbouring countries.
According to data from the Statistical Office of the Republic of Serbia and the National Bank of Serbia, inflation in recent years has hit essential living costs – food, energy, and housing – the hardest.
At the same time, the structure of the economy remains focused on sectors with lower added value, limiting wage growth.
An additional issue is that the prices of certain goods in Serbia are at, or even above, the European average, as confirmed by international databases such as Numbeo.
In practice, this means that most households spend the majority of their income on basic needs, leaving minimal room for savings or a higher standard of living.
What does purchasing power actually mean?
Purchasing power is not merely an economic indicator – it directly determines quality of life.
According to definitions by the OECD and the World Bank, it shows how many goods and services citizens can afford with their income, taking into account domestic price levels.
The difference between an index of 130 and 60 is not just statistical – it is the difference between living with financial security and living where every expense must be carefully weighed.
A two-speed Europe
The latest data clearly show that Europe operates as a two-speed continent.
One part enjoys a high standard of living and stability, while the other struggles with rising costs and limited incomes.
According to these indicators, Serbia still belongs to the latter group – and therein lies the key challenge for economic policy in the years ahead.
(Nova, 01.04.2026)