Price levels across the EU vary widely, with goods and services in the most expensive countries costing up to 2.4 times more than counterparts in cheaper regions. The differences are due to many factors, including taxes and labor costs.
Which goods and services are cheaper in your country than the EU average? Price level indices (PIIs) are designed to make such comparisons.
According to Eurostat, the EU’s official statistical office, the price level for household final consumer spending in 2023 varied significantly from country to country. Denmark has the highest price level at 143% of the EU average, followed by Ireland at 142% and Luxembourg at 135%. On the contrary, the price level was the lowest in Bulgaria and Romania – 60%, and in Poland – 66%.
This means that a 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. This means that in Denmark you will pay more than twice as much for the same basket as in Bulgaria.
The EU average is 100. A country is relatively expensive if its price level index is higher than 100. If the index is lower than 100, the country is considered cheap.
If the list includes the countries that are members of the Free Trade Association (EFTA), as well as EU candidates and potential applicants, Switzerland leads the way with a staggering 174% of the EU average, followed by Iceland at 156% and Denmark. – 143%.
The lowest price level was recorded in Turkey – 42%, North Macedonia – 52% and Bosnia and Herzegovina – 58%.
This stark contrast highlights the diversity of Europe’s economic landscapes, where the cost of goods and services can vary widely.
Alcohol and tobacco: buy in Bulgaria
In 2023, among the main groups of consumer goods and services, the largest gap in prices in the EU was observed in the category of alcohol and tobacco. The highest prices were recorded in Ireland (211% of the EU average), and the lowest – in Bulgaria (66%).
“Such a large spread in prices is mainly explained by differences in the taxation of these products,” Eurostat explained.
The price level was relatively lower in the Balkan countries, while it was higher in the Nordic countries. The latest UK figure available is for 2020, making direct comparisons difficult, but it was 165%, indicating the high value of these goods in the kingdom.
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 ranked second in price difference. The lowest tariffs are recorded in Bulgaria (52% of the EU average), followed by Romania (65%) and Hungary (72%). The highest prices are in Denmark (152%), followed by Finland (129%) and Ireland (128%).
The spread of prices is caused not only by taxes. This may be due to other reasons, such as the cost of labor and differences in local economic conditions. Differences in prices in other categories are less noticeable than in the alcohol and tobacco sections and in the hotel sector.
Clothing, for example, ranks third in terms of price dispersion: the difference between the cheapest and most expensive goods is 1.6 times. The lowest prices were noted in Spain (81%), Bulgaria (82%) and Hungary (88%). The most expensive clothes are in Denmark (131%), the Czech Republic (126%) and Estonia (118%).
Turkey was an exception in this category – only 30% of the EU average.
Differences in prices were also observed for food and soft drinks: from 74% of the EU average in Romania to 119% in Luxembourg. Consumer electronics ranged from 92% in Italy to 113% in France.