In 2022, price levels for household final consumption expenditure differed widely across the EU with the highest price levels recorded in Ireland (146% of the EU average), Denmark (145%) and Luxembourg (137%). The lowest levels were recorded in Romania (58%), Bulgaria (59%) and Poland (62%).
- While Denmark was the most expensive EU Member State for clothing and footwear, Bulgaria was the least expensive in the two segments, including alcoholic beverages and tobacco, says the data on price level indices published by Eurostat.
THE RESEARCH: A recent analysis of price levels for consumer goods and services in the European Union (EU), focusing on price level indices (PLIs) provides a comparison of countries' price levels relative to the EU average and are calculated using purchasing power parities.
- An understanding of the differences in price levels is important in the comparison of economic data, such as gross domestic product (GDP), because higher relative prices could make an economy look healthier than it really is.
- Observing price level differences is also important in the analysis of the development of the EU's single market for goods and services.
The results are based on price surveys covering more than 2 000 consumer goods and services which were conducted across 36 European countries participating in the Eurostat-OECD Purchasing Power Parities (PPP) programme.
- The group of participating countries includes the 27 EU Member States, three EFTA (European Free Trade Association) countries (Iceland, Norway and Switzerland) and six candidate countries (Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia and Türkiye).
THE FINDINGS: The highest price dispersion is found for alcoholic beverages and tobacco. This is mainly due to large differences in taxation on these products across the 36 countries.
- Less dispersion is observed in the prices of clothing and footwear.
- Price dispersion is naturally greatest within the 36 country group, which includes both the high price EFTA countries and the (mostly) low price candidate countries.
- Türkiye is the least expensive of the participating countries for clothing and footwear, as also for food and non-alcoholic beverages, where the price level in 2022 was around half of what it is in the EU.
- Among the EU Member States, Bulgaria is the least expensive country in all the above segments.
- In 2022, the price level in Norway was 43 per cent higher than the average in the 27 EU countries. This is actually a slight decrease from the level of the previous year, when it was the country with the third highest prices.
- Iceland's price level was 59 per cent above the EU average, but the most expensive was in the country that wealthy
Norwegians have flocked to lately, Switzerland. Prices there were as much as 74 per cent higher than the average in the EU.
- Ireland and Denmark had a price level in line with Norway's, and were the most expensive EU countries.
- Then follow Luxembourg and the Nordic Finland and Sweden.
The European purchasing power survey is also used to convert the countries' gross domestic product (GDP) into comparable figures.
- Luxembourg, Ireland and Norway lead the table, followed by Switzerland.
- While Denmark retained its fifth place, Sweden fell two places to ninth.
- The growth in GDP per capita for Norway was formidable, with an almost 27% increase, and in addition to Norway, only Turkey experienced double-digit growth from 2021 to 2022.
- The countries in the Balkans have the lowest GDP per capita—Albania's GDP was only 1/3 of the average for the 27 EU countries. Of the 27 member states, Bulgaria was at the bottom with a GDP that is 41 percent lower.
