Which EU Countries Changed Most in Cost of Living

Key Takeaways

• Estonia recorded the largest rise in the EU. Its household final consumption expenditure price level climbed from 43.6 in 1995 to exactly 100.0 in 2024.
• Five Eastern European countries rose more than 40 points toward the EU average between 1995 and 2024: Estonia, Lithuania, Czechia, Slovakia, and Latvia. All five joined the EU in 2004. EU accession opened these economies to trade and investment, raising wages and prices.
• Ireland recorded the largest rise among Western European countries, moving from 98.8 in 1995 to 138.1 in 2024. Multinational technology and pharmaceutical investment raised wages and local prices across the economy.
• Germany recorded the largest fall among Western European countries, from 118.0 in 1995 to 108.6 in 2024. Labour market reforms in the early 2000s suppressed wage growth, keeping German prices from rising as fast as other EU countries.
• Denmark and Belgium barely moved over the period. Denmark recorded 142.4 in 1995 and 143.1 in 2024.
• EU household final consumption price levels have converged over 30 years. Rising wages in Eastern European economies narrowed the gap between the bloc’s cheapest and most expensive countries.

Household Final Consumption Price Levels Across EU Member States

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In 1995, Estonia’s household final consumption expenditure price level stood at 43.6. By 2024, Estonia’s HFCE price level had reached exactly 100.0. Household final consumption expenditure (HFCE) measures what residents pay directly out of pocket. That includes groceries, clothing, rent, transport, and restaurant meals. Estonia’s shift is the sharpest in the EU. The same pattern ran across Eastern Europe over the same period.

Five Eastern European Countries Rose More Than 40 Points Toward the EU Average

The five countries with the largest HFCE price level increases all joined the European Union in 2004:

• Estonia: 43.6 to 100.0 (+56.4 pp)
• Lithuania: 31.3 to 81.6 (+50.3 pp)
• Czechia: 42.3 to 88.4 (+46.1 pp)
• Slovakia: 40.5 to 84.7 (+44.2 pp)
• Latvia: 39.8 to 81.8 (+42.0 pp)

EU accession opened these economies to foreign trade and investment. Wages rose across all sectors. Higher wages pushed up the cost of goods and services. HFCE price levels in all five countries rose toward the EU average as a result.

Romania and Bulgaria followed the same direction. Romania’s HFCE price level rose from 34.4 to 63.7. Bulgaria’s rose from 31.0 to 59.7. Both joined the EU in 2007. Both recorded smaller gains than the 2004 group.

Ireland Is the Only Western European Country Where the HFCE Price Level Rose Sharply

Ireland’s HFCE price level rose from 98.8 in 1995 to 138.1 in 2024. The gain of 39.3 points is the largest among Western European countries.

In 1995, Ireland’s HFCE price level sat just below the EU average. Major multinational technology and pharmaceutical companies built their European operations there over the following decades. This raised wages and local prices across the economy. Ireland now also ranks second in the EU on household final consumption expenditure.

Western European Countries Fell Closer to the EU Average on Household Final Consumption

Five Western European countries recorded falling HFCE price levels between 1995 and 2024:

• Germany: 118.0 to 108.6 (-9.4 pp)
• Finland: 132.1 to 123.5 (-8.6 pp)
• Sweden: 121.5 to 115.1 (-6.4 pp)
• France: 117.6 to 111.2 (-6.4 pp)
• Austria: 115.2 to 112.8 (-2.4 pp)

As Eastern European countries joined the EU and their price levels rose, the EU average shifted upward. Western European countries’ relative positions fell as the distribution compressed.

Germany’s price level fell the most. Labour market reforms introduced between 2003 and 2005 suppressed wage growth across the German economy. Lower wage growth kept domestic prices from rising as fast as in other EU countries. By 2024, Germany sat 8.6 points above the EU average, down from 18 points in 1995.

EU household final consumption price levels have converged over 30 years. The gap between the EU’s least and most expensive countries is narrower than it was in 1995. It has not closed.