Household consumption expenditure in Latvia up 5.4%

Household consumption expenditure comprised on average EUR 316 per household member monthly – 16 euros or 5.4 % more than in 2014. Considering 0.2 % increase of the consumer prices, consumption expenditure at constant prices rose by 5.2 %.

In 2015, the highest consumption expenditure (on average 388 euros per household member monthly) was recorded in Riga households – 2.9 % or EUR 11 more than in 2014. Last year, household consumption expenditure in urban areas grew by 6.1 % or EUR 20 and reached on average 343 euros per household member monthly. In rural areas, in turn, household consumption expenditure went up by 3.6 % or EUR 9 and reached on average EUR 259 per household member monthly, according to data from the Central Statistical Bureau of Latvia.

The increase in the consumption expenditure was due to the rise in household disposable income: in 2015, net wages and salaries grew by 7.6 %, employment rate rose by 1.7 percentage points and unemployment rate fell by 0.9 percentage points, respectively. Also household saving are growing. Data of the Financial and Capital Market Commission show that, compared to 31 December 2014, on 31 December 2015 household investments in Latvian banks have grown by 6.4 % or EUR 323 million.

Consumption is still dominated by the main costs, such as expenditure on food, housing, transport, clothing and footwear, as well as health. The share thereof accounted for more than two thirds (68 %) of the total consumption expenditure (in 2014 – 69 %). The highest amounts were spent on food – 26.5 % of the total consumption expenditure. Expenditure on food on average per household member monthly grew from EUR 82 in 2014 to EUR 84 in 2015.

The sharpest rise was recorded in expenditure on various goods and services (by 14.3 %), of which mainly on appliances and articles for personal care, as well as hairdressing salons and personal grooming establishment services, followed by restaurant and hotel services with an increase of 10.7 %, mainly catering services.

Increase was recorded also in expenditure on alcohol and tobacco (10.4 %), clothing and footwear (9.9 %), communication (8.4 %), furnishings and housing appliances (7.9 %), transport (7.4 %), health (6.6 %), recreation and culture (5.4 %), housing and dwelling maintenance (2.4 %).

Nevertheless in 2015 household consumption expenditure at current prices was 14 euros lower than in 2008, household expenditure on housing and dwelling maintenance, as well as health exceeded the pre-crisis level by 10 and 4 euros, respectively. The rise was due the sharp increase in the consumer prices for dwelling maintenance services – of 27%, and health – of 20%, compared to 2008.

Compared to 2014, in 2015 the most notable increase in the household expenditure was observed in households of self-employed – of 9.8%, whereas in households of wage and salary earners and pensioner households it constituted 5.3 % and 2.7 %, respectively. The highest consumption expenditure was recorded in households of self-employed (EUR 380) and of wage and salary earners (328), whereas in pensioner households consumption expenditure was notably lower – 255 per household member monthly.

Data of the Household Budget Survey show that – the more children in household, the less it can afford to spend per single person. Consumption expenditure in households with three and more children on average comprised EUR 192 per household member monthly, constituting only 61 % of the average national level of consumption expenditure. Households with one child spent on average EUR 294 per household member, while households with two children – EUR 280. The highest consumption expenditure was recorded in households with no dependent children. In 2015, consumption expenditure thereof on average accounted for EUR 346 per household member monthly.

Richest households (belonging to the 5th quintile group) generally were able to spend EUR 349 (per household member monthly) on food, housing, transport, clothing and footwear, and health, while poorest households (of the 1st quintile group) – EUR 123. Compared to poorest households, richest households spent 6.4 times more resources on recreation and culture.

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