A study conducted by a group of Slovenian economists has shown that the purchasing power relationship of the average Slovenian salary compared to the average salaries in Germany and Italy does not diminish despite Slovenia achieving higher economic growth rates than the two older members of the European Union in recent years.
The reason is that prices in Slovenian stores adjust (converge) to the European average more quickly than Slovenian salaries, as demonstrated by the study “Purchasing Power of the Euro in Slovenia, Germany, and Italy,” recently presented by a group of economists from the Faculty of Economics and Business in Maribor, led by Davorin Kračun, a former Minister of Foreign Affairs and later Ambassador to the USA.
The study examined the purchasing power of the average Slovenian, German, and Italian salaries based on price measurements in Maribor (Slovenia), Trieste and Udine (Italy), and Regensburg (Germany), taking into account several hundred items and services. It was found that the average Slovenian salary, which amounted to 777 euros in October of last year, has relatively stronger purchasing power than salaries in Italy or Germany because prices in Slovenia are 18 percent lower than in Germany and 15 percent lower than in Italy, allowing for 22 percent more to be purchased in Slovenia for the same amount of euros than in Germany and 16 percent more than in Italy.
Despite this, due to slower salary growth compared to national product growth, Slovenians with an average salary live significantly worse than Germans and Italians. The Slovenian salary in euros is only 51 percent of the average German salary and 59 percent of the Italian salary, thus much higher growth rates and productivity or less convergence of Slovenian prices to those paid by consumers in those countries would be needed to catch up with the standards in those countries. (H)
