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Friday 23.08.2019 | Name days: Valgudis, Ralfs, Vitālijs

Inhabitants to wait real wage increase in 2011

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The real monthly wage, which is determined by the changes in the prices, has been decreasing since the early 2009, and it is expected that, at the end of 2010, the pay will not be raised due to the forecasted increase in the price of foodstuff and the heating supply.

The Central Statistical Bureau (CSB) data show that in the second quarter of 2010, the real monthly wages have decreased by 9.1%, compared to the corresponding period of 2009, while the reduction in the net wages, broken down by year, was done at the extent of 11%.

Thus, it can be concluded that the price reduction has only slightly improved the lives of the inhabitants, and does not allow the increase in the domestic consumption. The recent data suggest that in June, 2010, the real salary cut was done even by 10.75% – which is the fastest this year.

Yet a more rapid reduction of the real wages was seen in the 4th quarter of 2009 – by 10.8%; however, the real income drop was smaller already in the 1st quarter of 2010 – by 8.9%, but in the 2nd quarter the situation again grew worse.

As regards the overall year 2010, the experts at SEB banka forecast a 7% fall in the real wages; whereas Swedbank predicts a 6.9% reduction of the average real net wage.

It should be noted that the overall real wage reduction in 2009 reached 5.6%, but the forecast cutback this year will be the second fastest since 1996, when it was 8.8%.

On September, when predicting the price climb in 2011 by 1.5%, Swedbank experts also estimated the real wage growth at the extent of 1.5%. While the real monthly wage has also been forecasted to increase by 2.5% in 2012, due to the increase in prices by 2.5%.

Accordingly, the specialists predict that the net salary will grow faster than the prices the next year, which, on the one hand, is likely to be affected by the reduced untaxed minimum increase, as well as by the overall economic growth.

Nevertheless, a situation where the price still continues to decline (which is suggested by, for instance, the International Monetary Fund) might occur, but the real wage will increase simply due to the fact that the pay will not decrease.


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