Albania one of the cheapest destinations in Europe

Cheapest restaurants and Hotels:
In Albania and in Bulgaria

Data furnished by Eurostat, The Statistical Office of the European Community reveal Albania to be one of the cheapest destinations in Europe. Albania ranks third, behind Bulgaria, a European Union (EU) member, and the Former Yugoslav Republic of Macedonia (FYROM), a non-EU state. Both Albania and the Former Yugoslav Republic of Macedonia are aspiring to become EU members.
Both countries have undertaken a series of reforms in their way to EU adhesion. FYROM is a candidate state to EU entry since 2005, while Albania has filed in April 2008 (April 28th) a request for winning the status of a candidate state.
Successive to the Eurostat news release of the 16th of July 2009 drawing the conclusions of a comparison of consumer prices between European countries in 2008, the Albanian media heralded the attractive positioning of Albania among more expensive countries than herself (Shekulli 17.07.2009, Top Channel, Shqip, 18.07.2009).
The comparisons are drawn from Statistics in Focus 50/2009, a report which under the title “Wide spread in consumer prices across Europe in 2008” enlists data concerning the former year and establishes a picture of price level indices in 37 European countries (27 EU countries and 10 non-EU countries).
A wide gap
The report stresses the wide gap between higher overall price level indices among the most expensive countries in Europe (Denmark 141, Norway 139, Switzerland 130, Ireland 127, Finland 125, Iceland 117, Luxembourg 116, etc.) and the cheapest countries of the continent (Former Yugoslav Republic of Macedonia 47, Bulgaria 51, Albania 53, Bosnia and Herzegovina 56, Serbia 58, Montenegro 62, Romania 62, etc.). The spread between extremes of the gap is almost triple while the median spread among the seven dearest and seven cheapest countries seems to be more than double.
The price level indices for consumer goods and services in 2008 are calculated on the basis of a standard price level index equaling 100 (EU27=100). This index expresses an EU average. Each individual country is compared in percentage to this EU27 index.
For example, overall prices in Albania in 2008 fall to 53 % of the EU27 average. Overall prices in Demark rise to 141 % of the EU27 average.
The report shows also a circumstantiated mirror of price level indices and breaks into 6 subdivisions: food and non-alcoholic beverages; alcoholic beverages and tobacco; clothing; consumer electronics; personal transport equipment; restaurants and hotels.
Cheapest restaurants and Hotels
In Albania and Bulgaria
Bulgaria with 40 % of the EU27 average level price index for restaurants and hotels, ranks first of this division among all countries in Europe. Albania is second cheapest in the hotel and restaurant category in Europe, with 44 % of the EU27 average and Former Yugoslav Republic of Macedonia (FYROM) comes third with 45 % of the EU27 average.
These statistics, which under the division “Restaurants and Hotels” include restaurants, coffee-shops, pubs, bars, canteens, hotels and hostels, show these countries particularly interesting for tourist visits. Together with lower restaurant and hotel prices, these countries evidence lower food and beverage prices and are among the cheapest destinations in Europe.
The Former Yugoslav Republic of Macedonia (FYROM) leads with 59 % of EU27’s price level index for food and non-alcoholic beverages, Bulgaria and Romania follow with 67 % and 71 % of the EU27 average respectively. Albania ranks fourth with 74 % of the EU27 average and is followed by Poland and Bosnia and Herzegovina, which rate both with 75 % of the of the EU27 average.
With regard to alcoholic beverages and tobacco, Montenegro heads with 41 % of the of the EU27 average. FYROM is second with 43 % the of the EU27 average. Bosnia and Herzegovina comes third with 45 % the of the EU27 average. They are followed by Serbia, 54 % the of the EU27 average, and Albania, 57 % of the EU27 average.
By way of comparison, in the division concerning alcoholic beverages and tobacco Norway rates a 217 % of the EU27 average and Ireland with 184 %.
Taxes and customs
The comparisons in the price level indices category of alcoholic beverages and tobacco manifest the highest spread in the gap between dearer and cheaper countries. This is not only due to prices in the market but also to customs and health and taxing policies of the concerned countries.
During the past years, such customs and taxes have generally been growing throughout Europe and the same tendency has been observed in Albania, where the tendency was reconfirmed with the late decision of the government to increase excise taxes. This tendency seems not to have been decisive in price levels in the neighboring countries.
The price level index of alcoholic beverages and tobacco in Norway or in Ireland reflects the highest customs and taxes in Europe, which swell the final price much more times than the real cost and the price of these products in the liberal market.
Taxes and customs also play an important role in pricing levels in other categories. One such other category where taxes and customs play an important role is that of food and non-alcoholic beverages.
Albania one of the highest VAT taxes on food and non-alcoholic beverages
Third among overall cheapest countries in Europe, Albania is one of the countries with highest VAT tax on food and non-alcoholic beverages. While the Value Added Tax (VAT) is only 5.5 % on a series of consumable articles in many European countries (France is one of them), VAT on food and non-alcoholic beverages in Albania amounts to 20 %.
Customs on imported food and non-alcoholic beverages help also augment the cost, since besides its local production, Albania imports large quantities of food and alcoholic and non-alcoholic beverages.
A good part of these articles are imported from neighboring countries among which the Former Yugoslav Republic of Macedonia (FYROM) plays an important part. But the neighboring country is not the only source of food imports. Still, an unscholarly calculation shows the price level index for food and non-alcoholic beverages in Albania (74 % of the EU27 average) match roughly the price level index for food and non-alcoholic beverages in FYROM (59 % of the EU27 average) plus 20 % of VAT (11.8 %).
Lowest spread
The categories where the spread of the gap between European countries is lowest are consumer electronics and clothing. Personal transport equipment follows, with a higher spread of the gap than the former.
The spread of the gap in the consumer electronics category is 36 points (122 – 86). In the clothing category, the spread of the gap is 54 points (125 – 71). Norway is the most expensive country with 125 % of the EU27 average and the Former Yugoslav Republic of Macedonia (FYROM) is the least expensive with 71 % of the EU27 average.
The spread of the gap in the personal transport equipment category is 90 points (174 – 84). This category includes motor cars, motor cycles and bicycles and excludes, like all the categories quoted in the report, maintenance and repair. Denmark is the most expensive country with 174 % of the EU27 average and Romania is the least expensive with 84 % of the EU27 average.
Albania highest prices in consumer electronics
Albania tops the consumer electronics and clothing price level index with 122 % of the EU27 average and is followed by Denmark and Norway, both with 121 % of the EU27 average.
The United Kingdom is the cheapest European country in this category, with only 86 % of the EU average, followed by Montenegro with 93 %.
Compared to data from a former report named “Statistics in Focus 63/2008”, with regard to consumer electronics in 2007, Albania has climbed in 2008 an extra 14 %. The price level index for consumer electronics in Albania in 2007 was 108 % of the EU27 average. It became 122 % of the EU27 average in 2008. Montenegro has climbed an extra 13 %, while United Kingdom has largely improved from its 103 % of EU27 average in 2007.