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Most Expensive and Cheapest Countries in Europe

Most Expensive and Cheapest Countries in Europe

Which are the most affordable countries in Europe? Which are the most expensive ones? In this post I am going to analyze such issues using a number of sources  and items (see below) that  can help solve this conundrum.  We saw earlier which are the most expensive and cheapest cities in Europe. Today I am going to focus on each country as a whole. The main parameters used to list the countries in this ranking are GDP per capita, place in the UN Human Development Index, the Big Mac Index, the price of the shopping basket in each country compared to the European average, the price of 1 Kg of rice (as representative of staple food) and then, within each country, you can even check the most expensive and cheapest cities.  As we all know, everything is relative (e.g., the market basket in a given country may be more expensive but taxes may be lower), but I think it can offer an overview of the current state of affairs.

While it is true that living standards tend to be lower in Eastern European countries, they are also generally cheaper, or more affordable, if you like, for tourists, expats or people teleworking online (such as freelance translators, copywriters, writers or graphic designers) for, say, western companies or agencies.  Portugal, Latvia and Bulgaria feature among the cheapest countries regarding income tax for self-employed or freelancers.On the other hand, Scandinavian countries are considered to be expensive  and have high taxes, but they also rank among the countries with the highest living standards not only in Europe, but in the whole world. They are undoubtedly an example of good governance for others to follow.

Today I won’t go into qualitative aspects, since many would argue —not without reason— that weather conditions, the nutritional quality of local food, the social fabric, the quality of social services, gender-equality policies, even the so-called Happiness Index… are key elements for a good quality of life. I fully share this view, but it is a different kettle of fish.

Below the list of the cheapest countries you can find a description of the main concepts and benchmarks I have used to draw up the ranking as well as the sources consulted.

Most expensive countries in Europe

suiza-pais-mas-caro-de-europa

Most expensive countries in Europe (starting with the most expensive one)

  1. Switzerland

    cost of living in Switzerland

Population: 8,544,034
Currency: Swiss Franc
GDP per capita: 80,590 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 3
Big Mac Index: 6.59
Cost of the market basket: 163% of the European average
Price of rice (white, 1 kg): 2.52 USD
Most expensive cities in Switzerland: Zurich, Geneva, Basel, Lausanne and Bern
Cheapest cities in Switzerland:Neuchatel, Aarau and St. Gallen
Taxes in Switzerland
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Average
Income tax: Low
VAT rate: low

  1. Norway

    Cost of Living in Norway

Population: 5,312,343
Currency: Norwegian Krone
GDP per capita: 74,940 USD (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 1
Big Mac Index: 5.51
Cost of the market basket: 137% of the European average
Price of rice (white, 1 kg): 2.98 USD
Most expensive cities in Norway:
Cheapest cities in Norway: Bodo and Kristiansand
Taxes in Norway
Since taxation is subject to changes, only an indicative level is given
Corporate tax: High
Income tax: High
VAT rate: High

  1. Iceland

    Iceland

Grocery shopping prices in Iceland

Youtube channel: Iceland with a view

Population: 350,710
Currency: Icelandic Krona
GDP per capita: 70,332 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 16
Big Mac Index: ——
Cost of the market basket: 125% of the European average
Price of rice (white, 1 kg): 3.47 USD
Most expensive cities in Iceland: Reykjavik
Cheapest cities in Iceland: —
Taxes in Iceland
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Average
Income tax: Average
VAT rate: High

  1. Denmark

    Slovakia most expensive and cheapest countries in Europe most expensive and cheapest countries in Europe

Population: 5,745,547
Currency: Danish Krone
GDP per capita: 56,444 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 4
Big Mac Index: 4.44
Cost of the market basket: 137% of the European average
Price of rice (white, 1 kg): 2.05 USD
Most expensive cities in Denmark: Silkeborg and Copenhaguen
Cheapest cities in Denmark: Horsens, Odense and Vejle

Taxes in Denmark
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Average
Income tax: High
VAT rate: High

  1. Luxembourg

    ranking most expensive and cheapest countries in Europe Cost of living in Europe

Population: 602,000
Currency: Euro
GDP per capita: 105,803 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 19
Big Mac Index: —
Cost of the market basket: 119% of the European average
Price of rice (white, 1 kg): 2.05 USD
Puesto en el índice de desarrollo humano: 19
Most expensive cities in Luxembourg: Luxemburgo
Cheapest cities in Luxembourg : —-
Taxes in Luxembourg
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Average
Income tax: High
VAT rate: Low

  1. United Kingdom 

    cost of living in the UK, England, Scotland, Wales, Ireland

Population: 66,040,229
Currency: Pound sterling
GDP per capita: 39,734 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 14
Big Mac Index: 3,94
Price of rice (white, 1 kg): 1.70 USD
Most expensive cities in the UK: London, Oxford, Portsmouth, Aberdeen and Bristol
Cheapest cities in the UK: Sheffield, Sunderland y Dundee
Cost of the market basket: 131% of the European average
Taxes in UK
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Average
Income tax: High
VAT rate: Average

  1. Finland

    ranking most expensive and cheapest countries in Finland most expensive and cheapest countries in Europe

Population: 5,517,887
Currency: Euro
GDP per capita: 46,016 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 24
Big Mac Index: 5.06
Price of rice (white, 1 kg): 2.20 USD
Most expensive cities in Finland: Helsinki and Tampere
Cheapest cities in Finland: Lapeenranta, Kuopio
Cost of the market basket: 120% of the European average
Taxes in Finland
Since taxation is subject to changes, only an indicative level is given
Corporate tax: High
Income tax: Average
VAT rate: High

  1. Belgium

    cost of living in Belgium countries ranking

Population: 11,469,204
Currency: Euro
GDP per capita: 43,582 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 21
Big Mac Index: 4.35
Price of rice (white, 1 kg): 1.74 USD
Most expensive cities in Belgium:Mons, Bruselas and Namur<
Cheapest cities in Belgium: Leuven and Liege
Cost of the market basket: 107% of the European average
Taxes in Belgium
Since taxation is subject to changes, only an indicative level is given
Corporate tax: High
Income tax: High
VAT rate: Average

  1. Netherlands

    most expensive and cheapest countries in the Netherlands European Union

Population: 17,254,086
Currency: Euro
GDP per capita: 48,345 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 5
Big Mac Index: 3.8
Price of rice (white, 1 kg): 1.62 USD
Most expensive cities in the Netherlands: Zwolle and Amsterdam
Cheapest cities in the Netherlands: Groningen and Enschede
Cost of the market basket: 109% of the European average
Taxes in the Netherlands (Holland)
Since taxation is subject to changes, only an indicative level is given
Corporate tax: High
Income tax: High
VAT rate: Low

  1. France

    cost of living in France EU most expensive and cheapest countries in Europe

Population: 67,297,000
Currency: Euro
GDP per capita: 39,869 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 22
Big Mac Index: 4.51
Price of rice (white, 1 kg): 1.90 USD
Most expensive cities in France: Perigueux, Paris, Lyon and Toulouse
Cheapest cities in France: Saint-Étienne, Montpellie, Marseilles and Perpignan
Cost of the market basket: 105% of the European average
Taxes in France
Since taxation is subject to changes, only an indicative level is given
Corporate tax: High
Income tax: High
VAT rate: Average
id=”Map_of_sovereign_states_in_Europe_by_2017_GDP_nominal_per_capita_based_on_USD_exchange_rate” class=”mw-headline”>GDP nominal per capita based on USD exchange rate

map Europe GDP per capita

Cheapest countries in Europe

most expensive and cheapest countries Moldavia cost of living in Moldavia

Cheapest countries in Europe (starting with the cheapest one):

  1. Moldavia/ Moldova

    Moldavia cheapest cities cost of living in Moldavia

Population: 3,564,000
Currency: Moldovan leu
GDP per capita: 2,279 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 107
Big Mac Index: 1.75
Price of rice (white, 1 kg): 0.95 USD
Most expensive cities in Moldavia: Tiraspol
Cheapest cities in Moldavia: Chișinău
Cost of the market basket: 40% of the European average

  1. Ukraine

    cost of living in Ukraine

Population: 42,895,704
Currency: Hryvnia
GDP per capita: 2,582 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 81
Big Mac Index: 1.57
Price of rice (white, 1 kg): 0.99 USD
Most expensive cities in Ukraine: Kiev, Lutsk, Lviv, Kirovoghrad, Dnipro and Kharkiv
Cheapest cities in Ukraine: Simferopol and Zaporizhzhya
Cost of the market basket: 45% of the European average
Taxes in Ukraine
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Low
VAT rate: Average

  1. Macedonia

    Cost of living in Macedonia

Population: 2,075,301
Currency: Macedonian Denar
GDP per capita: 5,474 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 81
Big Mac Index: 1.90
Price of rice (white, 1 kg): 1.26 USD
Most expensive cities in Macedonia: Veles
Cheapest cities in Macedonia: Prilep, Ohrib
Cost of the market basket: 48% of the European average
Taxes in Macedonia
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Average
VAT rate: Low

  1. Serbia

    cost of living in Serbia

Population: 7,040,272
Currency: Serbian Dinar
GDP per capita: 5,899 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 66
Big Mac Index: 2.08
Price of rice (white, 1 kg): 1.08 USD
Most expensive cities in Serbia: Belgrade, Valjevo
Cheapest cities in Serbia: Zrenjanin, Nis
Cost of the market basket: 49% of the European average
Taxes in Serbia
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: High
VAT rate: Average

  1. Albania

    cost of living in Albania

Population: 2,887,000
Currency: Albanian Lek
GDP per capita: 4,582 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 85
Big Mac Index: —–
Price of rice (white, 1 kg): 1.08 USD
Most expensive cities in Albania: Korçë
Cheapest cities in Albania:Tirana, Vlorë and Elbasam
Cost of the market basket: 47% of the European average
Taxes in Albania
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Average
VAT rate: Average

  1. Bosnia and herzegovina

    cost of living in Bosnia

Population: 3,750,000
Currency: Bosnia and Herzegovina convertible Mark
GDP per capita: 5,148 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 86
Big Mac Index: ——
Price of rice (white, 1 kg): 1.23 USD
Most expensive cities in Bosnia and Herzegovina: Zenica
Cheapest cities in Bosnia and Herzegovina: Bihac
Cost of the market basket: 51% of the European average
Taxes in Bosnia and herzegovina
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Low
VAT rate: Low

  1. Romania

    cost of living in Romania European ranking countries

Population: 19,622,000
Currency: Leu
GDP per capita: 12,523 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 5
Big Mac Index: —-
Price of rice (white, 1 kg): 1.04 USD
Most expensive cities in Romania: Focșani, Bucarest
Cheapest cities in Romania: Târgu Mureș
Cost of the market basket: 52% of the European average
Taxes in Romania
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Average
VAT rate: Low

  1. Bulgaria

    cost of living in Bulgaria Europe ranking list countries

Population: 7,050,034
Currency: Lev
GDP per capita: 8,064 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 59
Big Mac Index: 1,88
Price of rice (white, 1 kg): 1.22 USD
Most expensive cities in Bulgaria:Pleven
Cheapest cities in Bulgaria: Burgas
Cost of the market basket: 47% of the European average
Taxes in Bulgaria
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Low
VAT rate: Average

  1. Poland

    cost of living in Poland paises-mas-caros-y-mas-baratos-de-europa

Population: 38,433,600
Currency: Zloty
GDP per capita: 13,822 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 36
Big Mac Index: 2.42
Price of rice (white, 1 kg): 0.82 USD
Most expensive cities in Poland: Warsaw, Kraków and Bielsko-Biala
Cheapest cities in Poland:Rzeszów, Radom and Gorzów Wielkopolski
Cost of the market basket: 55% of the European average
Taxes in Poland
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Average
Income tax: Average
VAT rate: High

  1. Belarus

    cost of living in Belarus

Population: 9,452,113
Currency: Belarusian Ruble
GDP per capita: 5,760 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 50
Big Mac Index: —–
Price of rice (white, 1 kg): 0.95 USD
Most expensive cities in Belarus: Minsk
Cheapest cities in Belarus: Maladzyechna
Cost of the market basket: —
Taxes in Belarus
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Average
Income tax: Low
VAT rate: High

  1. Montenegro

    cost of living in Montenegro

Population: 642,550
Currency: Euro
GDP per capita: 7,647 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 49
Big Mac Index: —-
Price of rice (white, 1 kg): 1.25 USD
Most expensive cities in Montenegro: Budva
Cheapest cities in  Montenegro: Podgorica
Cost of the market basket: 55% of the European average
Taxes in Montenegro
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Low
VAT rate: Low

  1. Hungary

    cost of living in Hungary paises-mas-caros-y-mas-baratos-de-europa

Population: 9,771,000
Currency: Forint
GDP per capita: 15,531 (GDP nominal per capita – current international dollar)
Place in the UNDP Human Development Index: 44
Big Mac Index: 2.71
Price of rice (white, 1 kg): 01.06 USD
Most expensive cities in Hungary : Budapest, Szombathely y Györ
Cheapest cities in Hungary: Kaposvár, Szolnok y Kecskemét
Cost of the market basket: 57% of the European average
Taxes in Hungary
Since taxation is subject to changes, only an indicative level is given
Corporate tax: Low
Income tax: Average
VAT rate: High
***

Best European countries for self-employed workers or freelancers

Denmark

You can easily and swiftly register online as a self-employed worker. You don’t have to pay a monthly fee. Income tax ranges from 25% to 50% depending on the type of self-employed worker. Besides, you can benefit from one of the best welfare states in the world, which includes a wide range of social benefits and access to free education.

United Kingdom

If your income is less than £600 (7031€), you are free from the obligation to contribute. If you exceed this amount you pay a percentage depending on your profits. There is no such thing as a minimum capital to register a Limited Liability Company, in case you want to start up your own business.

Germany

Self-employed workers have to pay a compulsory health insurance. If your turnover is ≥ 1,700€ net per month, you must pay a 140€ monthly fee. Those who are under 30 years old and those who make less than 1,700€ don’t need to pay VAT. The downside is that if you want to start up your own company, it is not cheap (you need to pay 25,000€)

Portugal

In Portugal, self-employed workers don’t have to pay a monthly fee. They are not obliged to pay VAT either. It is one of the best countries to be a self-employed worker in Europe.

France

Even though you don’t pay anything during your first year as a self-worker, you are entitled to health care, pension contributions and temporary disability. After the first year, there is a scale stipulating how much a freelancer must pay depending on its income and  work activity. There is no minimum capital required to register a Limited Liability Company.

Explanation of the parameters used in this ranking

Most expensive and cheapest countries in Europe Cost of living in Europe
In red: most expensive countries    In blue: cheapest countries
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GDP per capita is a measure that divides the country’s gross domestic product (its economic output) by its total population.

The Human Development Index (HDI) is a composite index of life expectancy, educational standards, and per capita income indicators, which are used to rank countries into four tiers of human development.

Big Mac Index: The Big Mac Index, published by The Economist magazine, althought not perfect, is useful to measure the purchasing power parity (PPP) between countries and currencies. It uses the price of the famous hamburger as a benchmark. It somehow replaces the shopping basket with the famous hamburger.

Market basket: In an economic sense, a market basket is a permanent set of goods and services that are bought and sold as staples in a functional economy.  So it is is a fixed list of items, in given proportions, used specifically to track the progress of inflation in an economy.

I picked one kilo of white rice among  all the products which are representative of the cost of living because it is a minimally-processed staple food, so there is no need for a large number of productive factors as, for instance, a car.

Sources: Eurostat, Forbes, The Economist, statista.com, preciosmundo.com, Expatistan, bigmacindex.org, Numbeo.com

See also:

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