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Cost of living: How does Italy compare to the rest of the world?

How Italy stacks up for cost of living compared to the rest of the world.
How Italy stacks up for cost of living compared to the rest of the world. Photo by Vincenzo PINTO / AFP
Italy is now more expensive for the overall cost of living than the UK and the US according to new figures. Here's a closer look at how everyday costs compare.

It’s a common belief that the cost of living in Italy is generally cheap and cheerful, and this is often thought to explain the nation’s comparatively low wages.

However, new data reveal a different picture when it comes to the expenses of Italian life.

According to Numbeo’s Cost of Living Index for 2021, Italy is the 26th most expensive country in the world – coming directly ahead of the UK, US and Germany respectively.

It is ranked as being cheaper than Austria (24th), France (15th) and the famously expensive Switzerland – which was ranked second most expensive in the world. Bermuda placed first.

The survey was compiled using the notoriously expensive city of New York City as a benchmark. New York was given an index score of 100. So a country with a score higher than 100 is more expensive than New York, while below signals that it is cheaper.

READ ALSO: The parts of Italy where house prices keep rising despite the pandemic

Italy scored 73.11 overall. It was found to be around six percentage points more expensive than the UK for groceries but eight percent less than the US.

The Cost of Living index factors in average estimates for expenses for a four-person family, ranging from clothing, groceries and dining out to transportation, recreational activities and utilities.

Its Rent Index, on the other hand, is based on the costs of renting one- and three-bedroom apartments in and outside of city centres.

For this category, Italy ranks 37th out of 138 entries in total worldwide, coming behind Spain, the UK and Canada.

Italy was found to be eight points cheaper than the UK and almost 20 points cheaper than the US when it comes to rental accommodation.

Restaurant bills however were found to be higher on average in Italy than France, Germany, the US and the UK. Italy recorded around 20 percentage points higher than Spain for dining out.

Photo: Jürgen Scheeff on Unsplash

Italy ranks 30th for a food shop compared to 34th place for the Brits. But it is cheaper than Canada (23rd), the US (21st) and Australia (8th).

READ ALSO: The ten positives you’ll notice after moving to Italy from the US

Compared to its European neighbours, you’ll pay more at the till for your weekly groceries in Austria (25th), France (12th) and  Denmark (16th). On the other hand, Italy is more expensive than Germany (27th) and Spain (48th) for supplies to stock your fridge.

However, in a separate survey specifically focussed on this aspect of living costs, The 2021 Global Grocery Index found that Italy was in fact much higher up the scale for the cost and affordability of a grocery shop.

The findings from Net Credit are based on not just supermarket prices, but they also consider income. Researchers calculated the affordability of a basket of goods in each country as a percentage of the average daily wage.

The shopping basket they surveyed focused on ten staples including breakfast cereal, eggs, cheese, milk and bread.

Factoring this in, Italy ranked 15th most expensive worldwide for the cost of groceries, calculated as being 33 percent of a daily salary.

Based on these parameters, the US came in as the most affordable country when it comes to food shopping, where the same items will only take up 12 percent of the average daily earnings.

The least affordable country for doing a supermarket shop was Cambodia, where a list of the ten essentials there amounts to $50, which works out at a whopping 942 percent of the average daily salary.

In another recent study that honed in on the cost of living across 209 cities, Italy featured twice. According to Mercer’s Cost of Living City ranking, Milan came 36th in 2021, jumping from 47th in 2020, while Rome ranked 47th shooting up from 65th last year.

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Again, neighbouring Switzerland featured highly with three cities coming in the top ten most expensive cities in terms of cost of living. They are Zurich (5th), Geneva (8th) and Bern (10th).

The findings echo previous European studies which have shown the cost of groceries, eating out, internet and communications to be relatively high in Italy.

Within Italy itself, there can be huge regional differences. Broadly speaking, the north of Italy tends to be more expensive than the south. Milan is notorious for high rents, as revealed above, while it can be cheap to rent in small towns and villages.

Taking into account more than financials, a recent survey revealed the best and worst places to live in Italy based on quality of life.

Parma came first in the country for its healthcare, work and business opportunities, level of environmental protection, life satisfaction levels and how it managed the Covid-19 pandemic.


Member comments

  1. Interesting comments which mirror my own experience of living in the Marche (PU). While some foods are cheaper in the UK, the quality isn’t comparable. We are spoilt for choice here when eating out; we prefer our main meal in the day and workman’s lunches are not only delicious but a steal.

  2. Returned home for Thanksgiving. Went out to dinner with 6 friends in Boston and the bill came to 0 with a tip. No…. We didn’t drink champagne.and Italy is more expensive? Really?

  3. The point is that the costs are pro-rated against the level of income. Hence the USA is a less expensive place to live for an American, despite the fact that like-for-like groceries, restaurant meals and alcohol are generally significantly more expensive in the US. I recently took my weekly Italian supermarket bill and priced it up on an American online grocery store Web site (Roche Brothers). The US bill was 4 times that of the Italian supermarket. My family’s total healthcare cost here in Italy is 25 times less than a typical year’s co-pay fees in the US. As for eating out, just take a look at any restaurant Web site in the UK and then compare it with how much you pay here. As another reader has pointed out, you also have to add a 20 – 25% tip to a US bill. In all of my favourite restaurants here, they round the bill down. I am sure that a separate study of prices unrelated to local income would show the result that we all know is true. It is much cheaper living here than in the US or UK (although my German friends tell my that they find Italy to be more expensive).

    1. I live in Le Marche (lucky me!) Eating out is so cheap it’s embarassing. No one minds if you ask for uno per due. one to share, and with pasta courses so generous, only a thirty year old body builder could finish a helping single handed. fresh truffles are abundant and we recently had a fantastic meal at La Torre in Sant’Angelo in Pontano with two friends 4 courses. liberally garnished with fresh truffle and 2 bottles of really good local wine for just over 110 euro.
      If we have breakfast in a local bar with 2 brioche and two cappucci it cost 3 euros this morning. For all of it.

  4. We have just recently moved to Italy for our retirement. Although we notice some items in the grocery store to be slightly higher (mainly imported items), we are always surprised at the high quality of the produce in the grocery store and the very reasonable prices. We can get a standard pizza at our favourite osteria for Euro 5-8 here which would cost us 18-24 dollars in the U.S. and the U.S. product is vastly inferior to our local pizza. Our weekly food bill is much lower than it was in the U.S. for a similar diet. But, we do not live in Milano or Roma, but in the Abruzzo region with working people who could never afford the costs of eating out in a standard American restaurant. We always planned on at least 50-60 dollars for a meal there per person. Here, we can have primo, secondo, a glass of vino and a beer, dolce, and two caffe for around Euro 50-55 (for both of us). And, there is no expectation from the wait staff of a 20% tip. La dolce vita!

  5. Bonjour I live in Rome and Paris. Paris is much higher eating out. Awful coffee costs euro 2.65 in Paris many items cost a lot more

  6. As an (early) retiree, we found Italy to be way cheaper to live in compared to the UK. Mind you, we’re in a small city in Sicily, so…

  7. Anyone eating out in the USA and Italy knows that the cost is MUCH higher in the USA. Perhaps the study is flawed because it compares the pre-tax and pre-tip restaurant bill in the USA?

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