While inflation has been rampant across Europe, Lithuanians are particularly concerned about rising prices. Meanwhile, Germans still find consumer prices acceptable and wonder how Lithuanians survive on their income.
Lithuania reported inflation of 11% at the end of last year, something unseen since the boom of the 2000s. Forecasts for inflation this year range from 4% to 5.4%.
Prices of basic consumer goods, such as food and clothes, in Lithuania are by now very close to those in Western Europe, whereas average incomes, as well as the minimum wage, still trails behind.
This is particularly noticeable to Lithuanian expats who regularly return to their home country and can compare standards of living.
“I was flabbergasted and appalled,” Agne, who lives in Berlin, says about her last trip to Lithuania. “I thought everything was very expensive in Lithuania, compared to incomes. Food prices are particularly high.”
Average monthly salary was just over 1,000 euros in Lithuania last year, about a third of that in Germany. And although incomes grew, including the minimum wage, so did prices.
“Some things cost less in Lithuania but some things are so expensive,” says Lina, another Lithuanian who lives in Berlin. “I can’t imagine how people, who make much less money, can go shopping.”
Prices in Germany and Lithuania, she says, are nearly the same. “I keep asking my relatives, how can they survive?”
Germany has also experienced sharpest price rises in a decade, reporting yearly inflation of 5.2%.
Still, both Agne and Lina say they are not worried about prices in Germany.
“I am not looking at price tags,” says Agne. “My husband may note that, for instance, butter is more expensive, but generally we hear about it mostly from the news.”
Some goods, such as clothes, have long been perceived to be cheaper in Germany, with Lithuanians making regular shopping trips.
“I really remember how I used to save tons of money by shopping for clothes in Germany, because prices used to be much lower than in Lithuania,” says Migle from Vilnius. “I would pack a full suitcase, buying everything for myself, my husband and my kids. Perhaps I missed the big sales this time, but it seems that the prices have caught up.”
Joachim Ragnitz, professor at the Ifo institute for Economic Research, says food and clothing prices are comparatively low in Germany, “although there are great disparities among households and regions”.
Moreover, he adds, the price rises are thought to be temporary, “therefore, I do not think that it is a big problem”.
The minimum wage is to rise to 12 euros an hour this year, he notes, up from 9.6, while the average hourly rate in Germany is 19.38 euros.
In Lithuania, as of January 1 the minimum wage rose to 730 euros per month (before tax), or 4.47 per hour. (LRT/Business World Magazine)
