Growth in wages and salaries exceeds forecast

26.02.2015

Latest data compiled by the Central Statistical Bureau (CSB) show that in 2014 growth in average wages and salaries witnessed the most rapid growth since the recovery of the Latvian economy. In 2014, average monthly gross wages and salaries in the country accounted for EUR 765, and compared to 2013 it is a growth of 6.8% or EUR 49.

Changes in average monthly gross wages and salaries

Data source: Central Statistical Bureau of Latvia

In 2014 average wages and salaries in the private sector amounted to EUR 741, in the public sector - EUR 813, and in the general government sector - EUR 750. In the private sector wages and salaries rose more rapidly – by 7.4% annually, while in the public sector – by 6.1%.

The average number of salaried employees in the country recalculated at full-time units in 2014 as compared to 2013 grew by 1.1%, while gross wages fund grew by 8.1%.

In 2014 average monthly net wages and salaries accounted for EUR 560, and over the year they rose more rapidly than wages and salaries before taxes – by 8.6%. It can be explained with the reduction of employee social security contribution rate from 11.0% to 10.5%, as well as with the increase of non-taxable amount of personal income tax (non-taxable minimum and deduction for dependents) from 1 January 2014. It should be noted that from 1 January 2014 also the minimum wage in the country has increased from EUR 285 to EUR 320 or by 12.5%, which affected average wages and salaries.

In 2014 real increase in annual net wages and salaries, taking into account the rise of consumer prices of 0.6%, accounted for 8.0%.

In the 4th quarter of 2014, average monthly gross wages and salaries in the country accounted for EUR 786, and compared to the corresponding period of 2013, wages and salaries grew by 6.6%. Increase in the public sector accounted for 6.6%, of which 7.5% in the general government sector, and growth in the private sector amounted to 6.8%. Compared to the 3rd quarter of 2014 gross wages and salaries in the 4th quarter of 2014 grew by 1.7% (in the private sector - by 0.8%, in the public sector - by 3.3%, and in the general government sector - by 2.1%).

In the 4th quarter of 2014 net wages and salaries amounted to EUR 575 euros, and compared to the 4th quarter of 2013, it is an increase of 8.5%.

Changes in average monthly gross wages and salaries by sector, EUR

 

Q 4 
2013

2013

Q 3

2014

Q 4

2014

2014

Changes, %

Q 4 2014 over

Q 4 2013

Q 4

 2014 over

Q3

2014

2014

over

2013

Total

737

716

772*

786

765

6.6

1.7

6.8

Private sector

707

689

749*

755

741

6.8

0.8

7.4

Public sector

794

766

819

846

813

6.6

3.3

6.1

of which:

 

 

 

 

 

 

 

 

General government sector

725

701

764*

780

750

7.5

2.1

7.0

In 2014 the highest level of average wages and salarieswas recorded in financial and insurance activities sector, information and communication services, energy sector and public administration. In turn, the lowest average wages and salaries were observed in accommodation, food and other service activities sectors, education, art, entertainment and recreation sectors, real estate activities, and trade.
Changes in average monthly gross wages and salaries

Data source: Central Statistical Bureau of Latvia

In 2014 the most rapid growth of average gross wages and salaries was recorded in real estate activities - of 11.0%, in financial and insurance activities - of 9.8%, in administrative and support service activities - of 9.4%, in agriculture, forestry and fishing - 8.6%, and in accommodation and food services sector - of 8.3%.

Over the year wages fund both in real estate activities and financial and insurance activities showed growth, while the number of employees recalculated into normal (full-time) units decreased. In turn, in the remaining above-mentioned sectors wages fund grew more rapidly than the number of employees.

Over the year drop in the number of employees was also recorded in manufacturing and mining, energy sector and in other service activities sectors.

 

More information on wages and salaries in Latvia is available in the CSB database section Wages and Salaries.

___________________

Explanations

Data source: sample survey of individual merchants, commercial companies, state and local government institutions, foundations, associations and funds, as well as administrative data sources.

The public sector includes central and local government institutions and their commercial companies, companies with central or local government capital participation 50% and over, as well as foundations, associations, funds, and their commercial companies. Data on foundations, associations and funds and their commercial activities are not included in the information provided.

According to the European System of Accounts the general government sector includes central and local government institutions, social security fund, enterprises controlled and financed by the central and local governments.

Changes of the average monthly wages and salaries are calculated as not-rounded values, i.e., taking into account the value in cents.

When calculating average monthly wages and salaries the number of salaried employees is re-calculated into full-time units, thus eliminating the differences in salaries paid for various workloads.

* Data have been revised.

 

More information:
Lija Luste
Wage Statistics Section

Tel. +371 67366917