In September, harmonized index inflation was about the same in Romania, Slovakia, Croatia and very close to Belgium. However, the standard of living in these countries is completely different.

The difference between inflation and the cost of living

People often use the terms inflation and cost of living interchangeably. They do not mean the same thing, although they are closely related.

Inflation is the big picture. As the cost of food, clothing, or maintaining your car rises, purchasing power falls. The inflation rate is calculated monthly by the National Institute of Statistics based on a basket of goods and services that reflect the country’s consumption habits.

The cost of living is a little different. This concept is most often used when you want to compare the minimum income that covers your needs in different parts of the country or the world. For example, the cost of living in Bucharest is higher than in Teleorman or Giurgiu.

Going back to inflation and the consumer basket on which it is calculated, it varies greatly from country to country.

Using data from the International Monetary Fund, we looked at how different people’s consumption is in different countries. In other words, how much do different expenses weigh in the consumer basket.

Different weights of the consumer basket indicate a cultural pattern of consumption or the level of economic development.

A country can change the weights assigned to different categories to reflect changes in how consumers spend their budgets over time.

A country’s basket positions and the weights assigned to categories of goods and services in the basket can reveal what consumers prefer, or what their national economy has in particular. A useful tool for comparing weights is known as Engel’s law. “The poorer the family, the greater the share of food costs.” Ernst Engel was a German statistician who processed household expenditure data in the Kingdom of Saxony during the 19th century.

France: In the distribution of CPI weights, the category “miscellaneous goods and services” includes: payment for sex, security guards or astrologers

Alcohol, tobacco – 4.5%

Clothes, shoes – 3.7%

Food products, drinks – 15.8%

Housing, communal services – 15.3%

Health – 11.2%

Recreation, culture – 8.4%

Restaurants, hotels – 6.0%

Transport – 13.3%

Hong Kong – in conditions of inflation, housing and communal services make up more than a third of total costs

Hong Kong’s residential property market is notoriously expensive. Last year, it ranked third in the world for the most expensive rent and first for real estate prices. So it’s no surprise that housing and utilities account for more than a third of total spending in Hong Kong’s inflation calculations.

Alcohol, tobacco – 0.5%

Clothes, shoes – 3.2%

Education – 3.4%

Food, drinks – 9.6%

Housing, communal services – 36.9%

Health – 3.0%

Restaurants, hotels – 17.8%

GREAT BRITAIN: Britain’s spending structure is largely the same as Germany’s

Alcohol, tobacco – 3.5%

Clothes, shoes – 6.1%

Education – 3.0%

Food, drinks – 8.9%

Housing and communal services – 32.8%

Health – 2%

Restaurants, hotels – 7%

Mexico: Families spend a higher proportion of their money on food than families in rich countries

To account for inflation, Mexican households were observed to spend a higher proportion of their money on food than households in richer countries such as the US, UK and Canada, but less than households in poorer countries such as Ethiopia and Nigeria.

Alcohol, tobacco – 2.7%

Clothes, shoes – 4.8%

Education -3.5%

Food products, beverages – 25.8%

Housing, communal services – 19.6%

Recreation, culture – 4.9%

Restaurants, hotels – 9.5%

Transport – 13.8%

Italy – Low education costs

Along with fellow EU members France and Germany, education in Italy contributes very little to the inflation calculation: around 1% of the figure, which is a result of the free and low-cost, state-subsidized education available in all three countries.

Alcohol, tobacco – 3.6%

Clothes, shoes -6.5%

Education – 1.1%

Food, drinks – 19.3%

Housing and communal services – 11.2%

Restaurants, hotels – 8.3%

Transport – 12.7%

Germany. Housing costs account for approximately 32% of total costs

German consumers spend about 32% of their total spending on housing. In neighboring France, this figure is only 15%. In the EU, only Greece and Denmark have higher housing costs as a share of total household expenditure.

Alcohol, tobacco – 3.8%

Clothes, shoes – 4.5%

Education – 0.9%

Food, beverages – 9.7%

Housing, communal services – 32.5%

transport – 13%

Japan – transport costs are the lowest

Among the rich countries in our set, changes in transportation costs have the least impact on Japan. Private car ownership there has been declining for years, partly because owning a car is expensive. Tolls and parking fees are high, so it’s no wonder that Japanese people are ditching their cars and relying on public transportation, thus reducing their overall transportation costs.

Alcohol, tobacco – 1.6%

Clothes, shoes – 4.4%

Education – 3.3%

Food, drinks – 19.3%

Housing and communal services – 27.6%

Transport – 8%

Nigeria: More than half of spending is on food

On the other hand, only 1% is taken out.

Alcohol, tobacco – 1.1%

Clothes, shoes – 7.7%

Education – 3.9%

Food, beverages – 51.8%

Housing, communal services – 16.7%

Recreation, culture – 0.7%

Restaurants, hotels – 1.2%

Transport – 6.5%

Canada: Almost 17% of Canadian household spending is on transportation

The distances are great, so it’s understandable.

Alcohol, tobacco – 2.5%

Clothes, shoes – 5.1%

Food products, drinks – 11.3%

Housing and communal services – 24.9%

Restaurants, hotels – 6.8%

Transport – 17.1%

Sources used: IMF, Qz.com, Investopedia,