Publications - Working Papers IER SAS

The paper deals with the issue of how income inequalities are transformed into the ​​consumption in the period 2004-2015 in Slovakia. Building on our previous research, we expanded the analysis of consumption inequalities in post-crisis period and widened the context with accent on regional disparities as well as on possibilities to smooth consumption across time (by using savings, borrowing etc.). The price developments significantly contributed to the worsening of consumption inequalities between high and low income households, as prices of necessary goods and services grew much faster than prices of luxury goods and services, while the consumer basket of low income households consists mainly of essential goods and services. It turned out that deflationary trends that manifested in Slovakia between 2013 and 2015 together with a fall in interest rates and greater availability of loans and mortgages, as well as improving the labor market situation, encouraged the realization of the households´ postponed consumption, especially of low income households, resulting in slight reduction in the consumption inequality. However, attention should be drawn to the fact that at the macro level, growing divergence can be observed between the growth rate of loans and the growth rate of final consumption of households since 2011, indicating rising share of debt on final consumption.