Comparison of prices of goods and services in Europe, how Albania ranks

2024-07-30 14:05:00, Ekonomi CNA

Is your country more expensive than other European countries? Which goods and services are cheaper than the EU average in your country? Price level indices (PLI) were created to make these comparisons possible. They measure and compare the prices of goods and services between different countries.

Basically, PLIs show how much more expensive or cheaper goods and services are in a specific country compared to another country or group of countries, such as the EU or Europe.

The "general" indicator is the final consumption expenditure of households, which includes the direct expenditure of resident households. This indicator reflects the total expenditure on goods and services.

According to Eurostat, the EU's official statistics office, price levels for household final consumption expenditure varied significantly across the EU in 2023. Denmark had the highest price levels, at 143% of the EU average , followed by Ireland with 142% and Luxembourg with 135%. On the other hand, Bulgaria and Romania had the lowest price levels, both at 60%, and Poland at 66%.

In Albania, price levels for household final consumption expenditure were 66%, higher than neighboring countries such as Montenegro (64%), Bulgaria and Romania (60%), Bosnia Herzegovina (58%), North Macedonia (52%) and Turkey 42%).

This shows that a given basket of identical goods and services costs €143 in Denmark, €135 in Luxembourg, €66 in Poland and €60 in Bulgaria and Romania. This suggests, that you will pay more than double in Denmark, compared to Bulgaria for the same basket.

Since the EU average is set at 100, a country is relatively expensive compared to the EU if the country's price level index is higher than 100. If the price level index is lower than 100 , then the country is classified as 'relatively free' or 'free'.

Free Trade Association (EFTA), EU candidate countries and potential candidate countries are included — Switzerland topped the list at 174% of the EU average, followed by Iceland at 156% and Denmark at 143%.

The lowest price levels were found in Turkey with 42%, North Macedonia with 52% and Bosnia and Herzegovina with 58%.

This significant contrast highlights the different economic landscapes within Europe, where the cost of goods and services can vary greatly from one country to another.

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 gap 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 country of this category. Ireland (211% of the EU average) had the highest prices, while Bulgaria (66%) had the lowest.

"This large price difference is mainly due to differences in taxes on these products," Eurostat explained.

The price level was relatively lower in the Balkan countries, while the Nordic countries had higher levels. The latest figure available for the UK is from 2020, making direct comparison difficult, but it was 165%, indicating the high cost of these goods from the UK.

Germany (99%) was slightly below the EU average, while alcohol and tobacco prices in France were 32% higher than the EU average.

As for Albania, the price levels of alcohol and tobacco in 2023 were 79%, higher than all countries in the region except Greece (99%).

Restaurants and hotels had the second largest price differences, with the highest prices being nearly three times 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 in Denmark (152%), followed by Finland (129%) and Ireland (128%).

Price changes are not primarily driven by taxes. It can be attributed to other reasons, such as different labor costs and changes in local economic conditions.

Price level differences are less pronounced in other categories, compared to alcohol and tobacco, as well as in restaurants and hotels.

Clothing had the third largest price variation, with a 1.6 times difference between the cheapest and most expensive prices. The cheapest prices were in Spain (81%), Bulgaria (82%) and Hungary (88%). The most expensive clothes were in Denmark (131%), the Czech Republic (126%) and Estonia (118%).

Turkey was the most distinctive in clothing with only 30% of the EU average.

Price differences were also observed in food and non-alcoholic beverages, ranging 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 biggest price variations were observed in restaurants and hotels, while alcohol and tobacco ranked second./Monitor