The survey shows the price level indices (PLIs) for total household final consumption expenditure (HFCE) on goods and services. Switzerland and Norway tend consistently to have the highest prices, while south-eastern European countries show the lowest prices.
Prices for alcoholic beverages and tobacco are two and a half times higher in Norway compared with other European countries. Also, staying at hotel and eating out in Norway are 84 percent higher than in the EU.
About the Survey
The survey highlights the different prices for consumer goods and services in the European Union (EU), looking at price level indices (PLIs), which provide a comparison of countries’ price levels relative to the EU average and are calculated using purchasing power parities. It also provides an indication of the degree of price convergence in the EU Member States and considers price levels in the three EFTA countries (Iceland, Norway, and Switzerland), the acceding state Croatia, four EU candidate countries (Montenegro, the former Yugoslav Republic of Macedonia, Serbia and Turkey) and two potential candidate countries(Albania, Bosnia and Herzegovina).
Price levels for consumer goods and services differed widely across Europe. Among EU Member States, in Denmark consumer prices were 42 % higher than the average of the 27 EU Member States, while the cheapest country was Bulgaria (49 % below the average). If the price level index is higher than 100, the country concerned may be considered to be relatively expensive compared with the EU average and conversely, if the price level index is lower than 100, then the country is relatively cheap compared with the EU average.
An understanding of the differences in price levels is important in the comparison of economic data, such as gross domestic product, 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.