Kazakhstan took the final position in the rating of 40 European countries in terms of food expenditures in regular families. In developed European countries, people are used to spending about 8-12% of their income on food while Kazakhstanis spend about half of their salaries on the same purpose. This type of expenditure has been growing in Kazakhstan for the last five years. In the second quarter this year, the figure reached 51.4%.
At the bottom of the rating
At the end of 2020 experts from the agency called Rating had prepared a rating of European countries by their food expenditures. The rate was directly dependent on income level and food product prices. According to that rating among countries where people spend less on food and more on entertainment, eating out, etc. are Luxemburg, Netherlands, the U.K., Ireland and Germany.
Kazakhstan has placed on the bottom of the rating as the country’s citizens are used to losing about 49% of their monthly income in food stores. Their expenditures for entertainment are minimal (1.7%), as well as eating out (2.9%).
Another international rating that reflects the cost of living by Numbeo has also put Kazakhstan on 71st position out of 139 countries.
Numbeo collects data on the cost of living and quality of life from all over the world and uses New York as a measuring tool to compare various cities to each other while preparing its indices. For example, the Local Purchasing Power Index shows relative purchasing power in buying goods and services in a given city for the average net salary in that city. If domestic purchasing power is 40 (in Kazakhstan it’s just 32), this means that the inhabitants of that city with an average salary can afford to buy on an average 60% fewer goods and services than New York City residents with an average salary. In countries such as Switzerland, Australia and Luxemburg, purchasing power of people is similar to that in New York.
Cost structure in Kazakhstan is calculated by selective inquiries which are implemented each quarter and cover about 12,000 households all over the country.
Over the period between 2016 and 2020, food expenditures in Kazakhstan had grown by 2-2.5% each year. At the end of 2020, an average Kazakhstani family spent more than half of its income on food while five years ago it had spent 43%.
The highest level of grocery costs (more than 60%) is in three regions: Turkestan, Jambyl and the Almaty region. People spend about 54-59% of their income on food in Atyrau, Pavlodar, East-Kazakhstan and the city of Almaty. The lowest level of groceries index is in Nur-Sultan, the capital of Kazakhstan (38.6%). A high level of people’s income here is also proven by a quite high level of expenditures on entertainment, education, etc. (19.1%).
While being forced to spend almost half of their money on food, Kazakhstanis are prone to cut other spending patterns. For example, the percentage of spending on clothes, shoes, furniture, home appliances, etc. has decreased from 24% in 2016 to 22% now. In 2021 Kazakhstanis have spent 15.7% less money on paid services than in 2016. At the same time, a loan debt burden on people in Kazakhstan has risen from 3.4% to 5% over the last five years. In other words, Kazakhstan has less and less idle cash for people to put into the stock market or invest in themselves.