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Slovakia’s prices below EU average

SLOVAKS keep complaining about high prices even though they are about one third below the European average. But the whole picture should be completed with earnings, which however, are much lower, too.

SLOVAKS keep complaining about high prices even though they are about one third below the European average. But the whole picture should be completed with earnings, which however, are much lower, too.

“Thus grumbling about price tags in shops is not fully unjustified,” Dana Vrabcová, analyst with Poštová Banka, wrote in her analysis.

Prices of goods and services in Slovakia are 29 percent below the European average, according to calculations of Poštová Banka based on data of Eurostat for 2013. The average wage in Slovakia accounts for only about one third of the European average.

Slovakia was the seventh cheapest country in the European Union in 2013, when prices for goods and services made up 71 percent of the EU average. Bulgaria had the lowest price level, when it does not reach even 50 percent of the EU average. Poles, Romanians and Hungarians had price tags below 60 percent of the EU, too.

The highest prices are in the north of Europe where the price level in Denmark was 140 percent of the EU average, while in Sweden and Finland are 130 and 124 percent of the EU average.

The price level in Slovakia is the same as in the Czech Republic, but there are differences in individual categories. Czechs, for example, pay less for food, clothes or services of restaurants and hotels. They pay more by 10-20 percent for housing, utilities, health and education compared with Slovaks.

In Hungary the price level is 15 percent lower than in Slovakia. Hungarians pay less by about one fifth for education, restaurants and hotels, household appliances, and also clothes and footwear than Slovaks.

Out of Slovakia’s neighbours the price level is the lowest in Poland, 20 percent below that of Slovakia. Food and non-alcoholic beverages cost as much as 30 percent less in Poland while Poles pay also by about one quarter less for household appliances and costs of housing and utilities than Slovaks.

“Hungary and especially Poland are significantly cheaper than Slovakia,” Vrabcová wrote. “This is also the reason why shopping in neighbouring countries is attractive for Slovaks not only when currencies of these countries weaken against the euro.”

But while travelling to do shopping is financially interesting only for those living close to the borders, Vrabcová points out that such shopping tourism does not benefit Slovakia’s economy at all.

“While we are rejoicing over saving some euros, the money spent is not being included into figures of the Slovakia’s economy,” wrote Vrabcová, adding that it is merchants and state coffers in neighbouring countries who profit from Slovaks shopping abroad.

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