Price levels vary considerably across the EU: the highest are 2.4 times higher than the lowest. Variations differ depending on factors such as taxes and labour costs.
Is your country more expensive than other European countriesWhich goods and services are cheaper than the EU average in your country? Price level indices (PLIs) are designed to make such comparisons possible. They measure and compare the prices of goods and services between different countries.
Essentially, INPs indicate how much more expensive or cheaper the goods and services are in a particular country compared to another country or group of countries, such as the EU or Europe.
The “global” indicator It is the final consumption expenditure of householdswhich includes direct expenditure by resident households. This indicator reflects total expenditure on goods and services.
According to Eurostat, the EU’s official statistical office, household final consumption expenditure price levels varied significantly across the EU in 2023. Denmark recorded the highest price levelswith 143% of the EU average, followed by Ireland, with 142%, and Luxembourg, with 135%. In contrast, Bulgaria and Romania had the lowest price levelsboth 60%, and Poland 66%.
This indicates that a specific basket of identical goods and services costs 143 euros in Denmark, 135 euros in Luxembourg, 66 euros in Poland and 60 euros in Bulgaria and Romania. It suggests that one would pay more than twice as much in Denmark as in Bulgaria for the same basket.
Since the EU average is set at 100, A country is relatively expensive compared to the EU if its price level index is above 100If the price level index is less than 100, the country is relatively cheap or inexpensive.
If the countries of the European Free Trade Association (EFTA), EU candidates and potential candidates, Switzerland tops the list with a staggering 174% of the EU average, followed by Iceland with 156% and Denmark with 143%.
The lowest price levels were recorded in Turkey (42%), North Macedonia (52%) and Bosnia and Herzegovina (58%). This significant contrast highlights the diversity of European economic landscapes.where the cost of goods and services can vary widely from one country to another.
Alcohol and tobacco are more than three times more expensive in Ireland than in Bulgaria
In 2023, among the main groups of consumer goods and services, The largest price difference in the EU was observed in the alcohol and tobacco category. The price level in the most expensive country was about 3.2 times higher than in the least expensive in this category. Ireland (211% of the EU average) had the highest priceswhile Bulgaria (66%) had the lowest.
“This large price variation is mainly due to the differences in taxation of these products,” explained ‘Eurostat’.
The price level was comparatively lower in the balkan countrieswhile in the Nordic countries it was higher. The latest figure available for the UK is from 2020, making direct comparison difficult, but it was 165%, indicating the high cost of these products in the UK.
Germany (99%) was slightly below the EU average, while Alcohol and tobacco prices in France were 32% higher than the EU average.
Restaurants and hotels recorded the second largest price level differenceswith the highest prices being almost three times higher than the lowest. The lowest prices were recorded in Bulgaria (52% of the EU average), followed by Romania (65%) and Hungary (72%). The highest prices were recorded in Denmark (152%), followed by Finland (129%) and Ireland (128%).
Price variations are not primarily due to taxes. They can be attributed to other reasons such as different labor costs and differences in the local economic conditions.
Price level differences are less pronounced in other categories than in alcohol and tobacco, and restaurants and hotels.
Clothing ranks third in terms of price variationwith a difference of 1.6 times between the cheapest and the most expensive. The cheapest prices were recorded in Spain (81%), Bulgaria (82%) and Hungary (88%). The most expensive clothes were bought in Denmark (131%), Czech Republic (126%) and Estonia (118%). Türkiye, with only 30% of the EU average, is an atypical case.
They were also observed Price differences in food and non-alcoholic beverageswhich ranged from 74% of the EU average in Romania to 119% in Luxembourg. Personal transport equipment ranged from 90% in Slovakia to 129% in Denmark. Consumer electronics ranged from 92% in Italy to 113% in France.
In 2020 and 2021, The largest price variations were observed in restaurants and hotels, while alcohol and tobacco ranked second.
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