Prices in Lithuania are one of the lowest in EU due to cheap public services

VILNIUS – The difference in the goods and services price average in Lithuania and other EU states has gone down over the last 17 years but still remains one of the largest in the EU, figures from the EU statistics agency, Eurostat, show.

The price level in Lithuania made 60 percent of the EU average last year, down 15 points from 2000.

Speaking with BNS Lithuania, economists agreed that the general price level in Lithuania is lower due to cheap public services.

"Lithuania stands out in terms of the prices of public services which are unfoundedly low, and the consequences of that are negative. In some cases, public service workers get inadequate revenue," Swedbank chief economist Nerijus Maciulis told BNS Lithuania.

The Eurostat figures show the prices of accommodation, electricity, water, gas, science and healthcare services in Lithuania show the biggest difference from the EU average, making just 40 percent of the EU average.

Lower general price levels than in Lithuania are only in Hungary, Poland, Romania and Bulgaria. Meanwhile, prices are higher in Latvia and Estonia, making 68 and 74 percent of the EU average respectively.

Luminor economist Zygimantas Mauricas says the Latvian and Estonian markets are smaller than the Lithuanian one, thus, their price levels are closer to the EU average.

"Latvia and Estonia face less competition, and prices of goods are higher than in Lithuania. Moreover, the price level in the public service sector is higher as wages are higher," Mauricas told BNS Lithuania.

The prices of footwear and clothing are the highest in Lithuania, exceeding the EU average by 5 percent. These prices are the same as in Latvia, Italy, Germany and Austria, the Eurostat figures show.

The prices of foodstuffs and non-alcoholic beverages make almost 82 percent of the EU average, compared to 95 percent in Latvia and 94 percent in Estonia.

The prices of postal and telecommunication services make 60 percent of the EU average and it's the only indicator which has dropped over the last 14 years. It made 68 percent of the EU average in 2003.