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Wednesday 17.01.2018 | Name days: Tenis, Dravis
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Latvia has the highest income inequality among Baltic States

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn spite of measures intended to reduce the level of inequality in Latvia over the course of 2008-2012, income inequality indexes show the distribution of income in Latvia remain less balanced than other Baltic States.

In 2012, the Gini index in Latvia was the highest among all member states of the European Union (32.2%), demonstrating the highest level of inequality among different groups of residents. Estonia’s and Lithuania’s Gini index* values were lower than that of Latvia. However, both countries had higher indexes than the average in the EU (30.6% in 2012). This is demonstrated by information compiled by SEB Bank experts in the Financial Outlook for Baltic households.

Eurostat data for 2004-2012 demonstrate different inequality indexes in Baltic States. Despite the reduction of Gini index in 2008-2012 (from 37.5% to 35.2%), Latvia remains an anti-leader in regard to income inequality in the EU. Lithuania’s Gini index was 34% in 2008. During the period of economic decline, the index reached 37% (in 2010). However, the index declined by 5 percentage points over the course of the next several years – down to 32% in 2012. Estonia’s Gini index increased from 30.9% in 2008 to 32.5% in 2012. The average Gini index in the EU was rather stable and remained within 31% over the course of 2005-2012.

The S80/S20 index demonstrates a similar situation. Latvia’s S80/S20 of 2012 was 6.3 points, which is the third highest index among EU countries after Greece and Spain. Income of the wealthiest of residents was 6.3 times larger than those of poor residents. The S80/S20 index values of Lithuania and Estonia were 5.3 and 5.4 respectively, which is slightly above the average EU level (approximately 5 points in 2012). Latvia’s index has been reducing ever since 2008. In 2010, Lithuania’s index reached 7.3 points. It then dropped to 5.3 points in 2012. Estonia’s values of this index remained stable over 2008-2010. It then grew by 0.4, reaching 5.4 points in 2012.

SEB Bank social economy expert Edmunds Rudzitis: ‘20% of the poorest residents in Latvia earned 6.6% of total income in the country in 2012 (6.2% in 2008). 20% of the wealthiest residents, on the other hand, earned 42% of total income in the country, which is slightly less than they did in 2008 (43.1%). Income of the poorest residents in Estonia and Lithuania were 7.3% and 7.4% in 2012 respectively. The richest of residents earned 39.7% in Estonia and 39.5% in Lithuania. In order to reduce inequality in income in comparison with other Baltic States and come closer to the average EU level, Latvia should continue the realization of necessary economic measures.’

Ref: 102.109.109.4782


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