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Romania, Second Lowest Price Level in the EU for 2022

Romania, Second Lowest Price Level in the EU for 2022

Romania had the second lowest price level in the EU for the year 2022, with a value of 59.3% relative to the European average. Bulgaria was first, with an index of 58.5%, and above our country were situated Poland (60.7%), Hungary (67.7%), Croatia (73.5%), Lithuania (78.8%) and Czechia (84.3%).

*In 2022, the highest price level for consumer goods and services among the EU Member States was observed in Denmark (49% above the EU average) and the lowest in Bulgaria and Romania (41% below the average). 

*Household final consumption expenditure, abbreviated as HFCE, consists of the total outlay on individual goods and services by resident households, including those sold at below-market prices. HFCE includes imputed expenditures or transactions which do not occur in monetary terms and can therefore not be measured directly.

Data is collected from the most recent analysis of price levels for consumer goods and services in the European Union (EU), focusing on price level indices (PLIs), which provide a comparison of countries’ price levels relative to the EU average and are calculated using purchasing power parities.

Among the EU Member States, Romania is the least expensive country for food and non-alcoholic beverages (71.8%) and Bulgaria is the least expensive country for the other three categories (alcoholic beverages and tobacco 66%, clothing 79.8%, and footwear 82.3%). Denmark was the most expensive EU Member State for food and non-alcoholic beverages (120.8%), clothing (134.3%) and footwear (126.7%) in 2022. Prices in Finland are well above the European average for alcoholic beverages and tobacco (174.1%). 

Energy price puts Romania in 16th place among the 27 member states, with an index relatively high compared to the former Eastern bloc countries (85.5%, way more than in neighbouring Hungary, 38.4%, and Bulgaria, 55.7%) and similar to a developed country like Norway (85.9%). 

On the other hand, furniture (index 72.2%, second lowest after Bulgaria, 60.4%), household appliances (86.9%, second after Poland, 84.7%) and consumer electronics (95.2%, again after Poland, 92.8%) are relatively cheap and that constitutes a big advantage for the consumers.

There are nine member states which have a lower index than Romania (94.7%) regarding personal transport equipment. Poland (87.5%), Slovakia (89%) and Cyprus (91.3%) are on the affordable podium, with Denmark (132.7%), Netherlands (114.3%) and Ireland (113.8%) at the other end. 

Fortunately, transport services (65.7% index for Romania) are slightly more costly than in Bulgaria (55.6%), Hungary (61.4%) or Poland (65.1%), well below those encountered in Denmark (154.7%), Sweden (151.4%) and Finland (138.6%).

Communication cost is second best after Poland (50.1%, compared to 48.5%) and much lower than in the neighbouring countries (82.4% in Bulgaria and 84.3% in Hungary). It is a very big asset that should be used for improving services, including public ones, which have lot of room for improvement.

At last but not the least, restaurants and hotels are still relatively cheap, with the second lowest price index after Bulgaria (61% against 50%). A bit under Hungary (61.9%) but clearly better than in Czechia (68%), Portugal (73.2%) or Poland (77.3%), not to mention the situation in Denmark (154%), Finland (130.4%) or Luxembourg (130.3%).

The results of this survey are expressed in the form of price level indices (PLIs). PLIs are the ratios of PPPs to exchange rates. They provide a comparison of countries’ price levels relative to the European Union average: If the price level index is higher than 100, the country concerned is relatively expensive compared to the EU average, while if the price level index is lower than 100, then the country is relatively inexpensive compared to the EU average. The EU average is calculated as the weighted average of the national PLIs, weighted with expenditures from national accounts.

Price level indices are not intended to rank countries strictly. In fact, they only provide an indication of the order of magnitude of the price level in one country in relation to others, particularly when countries are clustered around a very narrow range of outcomes. The degree of uncertainty associated with the basic price data and the methods used for compiling PPPs, may affect in such a case the minor differences between the PLIs and result in differences in ranking which are not statistically or economically significant.

All in all, these figures should point out that Romania has a major advantage related to the current levels of prices. It was a major factor for reaching a GDP of 76% of EU average in 2022, that puts us in place 21-22 of the 27 member states, alongside Hungary, above Latvia, Croatia (both with 73%), Slovakia (71%), Greece (67%) and Bulgaria (67%) and close to Poland and Portugal (79%).

That is why a firm trajectory in the coming years to a lower inflation and a steady exchange rate against the euro are crucial to maintaining the living standard, while keeping under control, inside macroeconomic correlations, the public wages and social benefits offered, especially those for old age. 

Photo source:




The Market For Ideas Association

The Romanian-American Foundation for the Promotion of Education and Culture (RAFPEC)

Amfiteatru Economic