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International Internet Magazine. Baltic States news & analytics Thursday, 28.03.2024, 10:46

Personal income in Estonia and Latvia exceeds pre-crisis level for the first time

BC, Riga, 07.05.2015.Print version
Personal income in Estonia and Latvia now exceed the pre-crisis level, while Lithuania has not yet returned to the pre-crisis salaries, according to the latest survey of Baltic households by SEB banka, cites LETA.

It took Estonia and Latvia six years to return to the pre-crisis income of employed residents (taking into account inflation). Lithuania still not has achieved this and employees in Lithuania still have lower purchasing power than in 2008.

 

In 2014, employees' real net wages increased the most in Latvia – 8%. In Lithuania and Estonia, employees' real income grew about 5% last year.



 

In Latvia, employees' real net wage in 2014 was 2.3% higher than before the crisis. In the last quarter of 2014, employed' residents purchasing power was 3.2% higher than in the fourth quarter of 2008.

 

In Estonia, real net wage last year was 3% higher than in 2008, and in the last quarter of 2014, employees' real income in Estonia were 4.3% higher than in the second quarter of 2008 when wages in Estonia reached the highest level before the crisis.

 

In Lithuania, real net wage in 2014 was 4.2% lower than in 2008.

 

SEB banka socioeconomic expert Edmunds Rudzitis explained that the increase in nominal wage and low inflation both contributed to higher purchasing power in the Baltic countries.

 

"While inflation is low and prices for basic commodities are growing just a little or even decreasing, consumers may afford to buy more goods and services. Of course, higher incomes and increasing purchasing power differ across various socioeconomic groups – part of households do feel that life quality is improving, while the other part do not feel the effect of economic growth and higher salaries," said the expert.

 

Purchasing power and financial situation has been improving notably for employees during the past several years, whereas pensioners' purchasing power has been growing at a slower pace.

 

Estonia recorded the highest increase in pensions in the Baltic countries last year – 5.6% to EUR 349.6 a month. Average pension in Latvia and Lithuania increased, respectively, 2.6% and 0.5% as compared to 2013, and in the last quarter of 2014, Lithuania had the lowest pension in the Baltic countries – EUR 240.6. Average pension in Latvia was EUR 271, which is 12.6% more than in Lithuania and 22.5% less than in Estonia.

 

Pensioners' real purchasing power in Latvia and Estonia is close to the previous record high (2009 in Estonia and 2010 in Latvia), whereas in Lithuania, average pension is 7% smaller than in 2009.






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