Tallinn the most expensive Baltic capital

  • 2004-05-13
  • By Baltic News Service
VILNIUS - Tallinn retains its title as the most expensive Baltic capital in terms of living cost, with Vilnius in second and Riga in third, the third annual survey carried out by Baltic business dailies has shown.

Prices in Vilnius spiraled for the second consecutive year, the Verslo Zinios daily reported on May 6. Almost all categories of products and services underwent a price-rise in Vilnius and Tallinn, whereas in Riga the prices of a few categories of products quoted by the papers remained un-changed.
The prices of tobacco, hotel accommodation, housing and fines for traffic violations rose steeply in all three countries. Among the Baltic capitals, Vilnius had the lowest prices of vodka and refurbished housing.
At the same time, interest rates declined, while the tariffs of banking services notched higher. Lithuania offered the most favorable conditions for making a profit on investments on the bourse last year. However, the interest offered by Lithuania's banks for long-term deposits was lower than in neighboring Latvia and Estonia.
Tallinn led the ranking of most expensive Baltic cities for the third consecutive year. However, Estonia boasted the largest average monthly wages, well surpassing runner up Lithuania.
According to the survey report, changes in consumer prices have failed to comply with macroeconomic tendencies, as inflation in Latvia was the highest among the three countries, at 2.9 percent, while consumer prices in Lithuania showed an annual decline of 1.1 percent in 2003.
However, the price developments revealed a significant relation with the GDP per capita rate, which is the lowest in Latvia at 36.6 percent of the EU average. In Lithuania, the rate amounted to 41.4 percent of the EU average, and in Estonia - 42.2 percent.
Curiously, Estonia's Center Party has submitted a bill to Parliament on May 5 to lower value-added tax on food from 18 percent to 5 percent starting in 2005 in an effort to curb the rapid rise of prices that, in the opinion of MPs, has led to a spike in food prices.