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Monday 18.12.2017 | Name days: Klinta, Kristaps, Kristofers, Krists

Residents’ ability to cover everyday expenses improves in Latvia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn 2016, population perception of the ability to make ends meet, namely, to pay for usual necessary expenses, has changed positively.

Increasingly more households admit that pay for usual necessary expenses with some difficulty or fairly easily (rise from 45.6 % in 2014 to 49.7 % in 2015 and 52.8 % in 2016). The share of households paying for usual necessary expenses with difficulty or with great difficulty keeps declining – from 50.5 % in to 45.1 % in 2015 and 42.1 % in 2016, according to data from the Central Statistical Bureau of Latvia.

The smallest proportion of households indicating that pay for usual necessary expenses with difficulty or with great difficulty was recorded in Riga and Kurzeme – 36 % and 38.4 %, respectively. Moreover, compared to other Latvian regions, the largest share (7.8 %) of the households having the most optimistic perception of own ability to pay for usual necessary expenses – easily or very easily – was observed in Kurzeme.

However, more than a half of Zemgale and Latgale households (51.1 % and 50.6 %, respectively) pointed out that make ends meet with difficulty or with great difficulty. Only small part of the households living in these regions admitted that pay for usual necessary expenses easily or very easily (3.5 % in Zemgale and 2.9 % in Latgale).

Analysis of the educational level attained by the household main breadwinner at working age (aged under 64) shows that education has notable influence on the household welfare. In 2016, 62.7 % of the households the main breadwinner of which had basic or lower education paid for usual necessary expenses with difficulty or with great difficulty. The share households with the same opinion was significantly larger among those the main breadwinner of which had attained higher education – 22.8 %. Moreover, 10.5 % of those households admitted that make ends meet easily or very easily.

The greatest difficulty to pay for usual necessary expenses was faced by households consisting of one person aged over 65 and by those consisting of one adult with children.

Compared to 2015, the sharpest reduction in the proportion of households paying for usual necessary expenses with difficulty or with great difficulty was observed among couples with children. In 2016, the share of such households among couples with three or more children fell by 8.1 percentage points, among couples with two children by 5.2 percentage points and among couples with one child by 3.6 percentage points. Ability to make ends meet in households consisting of single person (aged under 64) remained almost as much difficult as before. In 2015, 44.7 % of these households paid for usual necessary expenses with difficulty or great difficulty, while in 2016 those were 44.1 %.

In 2016, Latvia population admitted that one household member would need at least 510 euros monthly to pay for usual necessary expenses, which is 5.6 % or 27 euros more than in 2015 and 12.8 % or 58 euros more than in 2014.

However, along with the rise in the sum necessary to make ends meets also increase in the household disposable income may be observed. In 2015, Latvia population indicated that one household member would need at least 483 euros monthly to make ends meet, while household disposable income, reaching 417 euros per household member monthly, constituted 86.3 % of that sum. In 2014, the share of household disposable income was slightly smaller – 85.6 % of the sum necessary to pay for the usual necessary expenses.

In 2015, households of 1st and 2nd quintile group had the greatest gap between the disposable income and the sum necessary to pay for usual necessary expenses, moreover they named notably smaller sums needed to make ends meet. Households of the 1st quintile group indicated that one household member would need at least 339 euros monthly, and 2nd quintile group households admitted that at least 407 euros monthly.

However, disposable income of these households considerably lagged behind the minimum sum necessary to make ends meet. Reaching 150 euros per household member monthly, disposable income of the 1st quintile group households constituted only 44.2 % of the sum necessary to pay for usually necessary expenses. Disposable income of the 2nd quintile group households, reaching 257 euros per household member monthly, in its turn, comprised 63.1 % of the minim sum necessary to make ends meet.

In 2016, 66.9 % of the poorest households (belonging to the 1st quintile group) paid for usual necessary expenses with difficulty or great difficulty. The proportion of those among richest households (belonging to the 5th quintile group) was significantly smaller. Moreover, compared to poorest households, 5th quintile group households indicated significantly higher sum needed to make ends meet – at least 724 euros per household member monthly.

Compared to 2015, the sharpest decline (of 5.4 percentage points) in the share of households paying for usual necessary expenses with difficulty or great difficulty was recorded in the 3rd quintile group. The proportion of such households in the 2nd quintile group fell by 3.5 percentage points, while in the 1st (bottom) quintile group – only by 1.4 percentage points.


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