According to the findings of the latest GfK purchasing power survey for Germany, disposable income will fall by €42 per capita in 2010. The effects of the economic crisis will reach private consumers. However, this nominal decrease in purchasing power is likely to be kept in check by low inflation. The survey conducted by GfK GeoMarketing also shows that there are major differences in the level of purchasing power between the various regions in Germany.

Germans will have purchasing power totaling around €1,550.2 billion in 2010. Purchasing power measures the net disposable income of the population including national benefits such as unemployment benefit, child benefit and pensions. In 2010, the purchasing power in Germany will decrease by €7.5 billion or 0.5% compared with 2009 due to decreasing incomes as well as a decline of 216,000 inhabitants. This corresponds to a decrease of €42 per inhabitant in 2010. On average, Germans will have €18,904 per capita per year to spend on the costs of living and consumption.

In view of a probable stagnation in wage development and growing unemployment, Germans will have to economize more. However, low inflation is likely to keep further losses in check. The purchasing power of individuals depends particularly on whether they have secure employment or, for example, are experiencing large income reductions as a result of redundancy. The development of the labor market will have the greatest influence on the propensity of households to consume and on recovery from the economic crisis.

The perennial top 3: Hochtaunus district, Starnberg, Munich

As in 2009, the three areas of Germany with the highest level of purchasing power in 2010 will be the Hochtaunus district, the Starnberg rural district and the Munich rural district, with €27,426, €27,095 and €26,057 per capita respectively.

Among the 25 districts with the highest purchasing power, the Freising rural district (Bavaria) climbed 3 places from no. 17 to 14, with €22,581 per capita. The Erlangen-Höchstadt rural district also moved up three places, to no. 22. The Harburg rural district (Lower Saxony) fell by the most places, sliding from 13 to 18. A new entry in the top 25 is the Erding rural district (Bavaria), which was still ranked at no. 28 last year and is now 23. The Mettmann rural district (North Rhine Westphalia) is no longer represented in the top 25, having fallen four places. Otherwise, changes in the top 25 involved maximum a movement of two places.

East-West divide still clearly in evidence

The most prosperous district in Eastern Germany - Potsdam-Mittelmark in Brandenburg - is ranked no. 190, with a net disposable income of €18,594 per inhabitant. The second-ranked East German district – the Potsdam urban district in Brandenburg, also bordering Berlin – comes 45 places further down at no. 235, followed by the Oberhavel urban district (Brandenburg) at 247.

The 25 districts with the lowest level of purchasing power are in all Eastern Germany, with the sole exception of the West German Bremerhaven urban district, at no. 401, whose inhabitants have disposable income of €15,053. As in the previous year, the Uecker-Randow rural district came in last out of all 413 urban and rural districts, despite positive development of the index (+1.0 to 73.5). Inhabitants of this district have €163 more purchasing power on average than in 2009; however, they only have a total of €13,893 which corresponds to around half of the purchasing power in the richest district.

Growth bucking the crisis trend: the East catches up

A different picture emerges when comparing growth in purchasing power in the various federal states: Here, Eastern Germany clearly outperforms the West. Among the 25 districts with the greatest positive changes compared with the previous year, there are 23 East German and just two West German districts. These are the Neustadt an der Waldnaab rural district (Bavaria) and the St. Wendel rural district (Saarland), which rose 23 places in the rankings and was therefore the highest climber.

Of the 25 districts with the greatest negative change in purchasing power compared with the federal average, none are located in Eastern Germany. Fourteen are in Bavaria, five in North Rhine Westphalia, three in Hesse and one in Baden-Württemberg, Rhineland Palatinate and Lower Saxony respectively. The federal states with strong economic performance such as Bavaria, Baden-Wuerttemberg, Hesse and Rhineland Palatinate have been more affected by the crisis, not least because of their high dependency on exports and the consequent increase in unemployment. As a result, purchasing power in these states fell compared with the federal average, benefitting the East German states.

The East-German federal states: weak, but on an upward course

The federal states with the lowest rankings last year have swapped positions. Saxony-Anhalt, which was formerly bottom of the rankings, has been replaced by Mecklenburg-Western Pomerania. With purchasing power of €15,672 per capita, Mecklenburg-Western Pomerania now takes last place and has around 17% less purchasing power than the federal average. Otherwise, there have been no further changes in the order of the federal states. Bavaria (€20,505 purchasing power per capita) is still in the lead, followed by Hesse (€20,343) and Baden-Württemberg (€20,227). Despite the fact that Saxony-Anhalt and Mecklenburg-Western Pomerania have the lowest levels of purchasing power in a comparison of the federal states, they are still among those that have recorded the largest purchasing power growth, along with Brandenburg and Thuringia. In Saxony-Anhalt, inhabitants will have an average of €146 more in their pockets, followed by Brandenburg with €126 more and Mecklenburg-Western Pomerania with €120 more per capita. In contrast, the index of the federal state of Berlin has decreased by 0.3%, so that the purchasing power of the average Berliner will decline by €96 in 2010 compared with 2009. Similarly, inhabitants of the federal states of Bremen, Lower Saxony, North Rhine Westphalia and Hesse will have around €80 less at their disposal.