Household consumer expenditure in 2006

16.07.2007

The provisional Household Survey data on private households’ consumption expenditures in 2006, compiled by the Central Statistical Bureau of Latvia, witness sharp growth of population income: net wages and salaries in domestic economy have increased by 23%, the pensions paid by the State Social Insurance Agency – by 18%, rapidly increased the number of consumption credits granted by the banks. These processes have also affected the consumption expenditure of households.

Average household’s1 consumption expenditure in 2006, calculating per household member monthly, reached 155 LVL, what is 21% more than in 2005. This is one of the highest indicators during last years.

The increase of the consumption expenditure was equal in both urban (by 21%) and rural areas (by 20%).

Household consumption expenditure (total in cash and in kind) in 2005 and 2006
(average per household member monthly, LVL)

All households

Urban

Riga

Rural areas

2005

128

142

170

99

2006

155

172

201

119

2006/2005 (%)

121

121

118

120

 

Urban households still had higher consumption expenditure, where it reached 172 LVL per household member monthly (in Riga households – 201 LVL), but in rural areas consumption expenditure was noticeably lower– 119 LVL per household member. It should be mentioned, that not all consumption expenditure is made in cash. Important part, especially in rural areas, constitutes the consumption of self-made goods and other expenditure in kind. In Latvia the average expenditure in kind, calculating per one household member, was 7 LVL, but in rural households 11 LVL.

Undeniably, the main households’ consumption priority l is still the expenditure on the food (28% of all consumption expenditure), it’s percentage each year has a tendency to reduce. The expenditure on transport (13%) and housing2 (12%) reaches noticeable percentage. Overall, in all households the average expenditures on food, dwelling maintenance and utility payments, transport and purchases of clothing and footwear represented 61% of consumption expenditure.

Structure of household consumption expenditure
(in per cent)

2005

2006

The percentage of consumption expenditure on food is one of the internationally comparable material welfare indicators. In our neighbouring country Lithuania the food expenses constituted 34% of household’s consumption expenditure, but in Estonia – 25%.

In 2006 expenses on transport had the most dynamic growth – by 37%, on recreation and culture - by 35%, furnishings, household equipment and routine maintenance of the house – by 28%, as well as expenditure in restaurants, cafes and hotels – by 28%, what shows certain tendencies of the welfare increase in the households.

Examining the consumption expenditure in breakdown by socio-economic groups, we can see, that households of employers and self-employed lives considerably better, their consumption expenditure is 181 LVL (average monthly per household member), as well as households of wage and salary earners having consumption expenditure 164 LVL. In both households of employers and self-employed and households of wage and salary earners consumption expenditure on food constituted 26% of consumption expenditure. But the households of pensioners, in turn, spent 43% on food, on covering expenses on dwelling maintenance – 19%, but on health, in turn – one fifth (9,4%) of consumption expenditure.

Structure of consumption expenditure by socio-economic group
(in per cent)


According to survey data the highest rate of the consumption expenditure was in households of Riga (201 LVL per household member) and region of Pieriga (151LVL) . In other regions the consumption expenditure per one household member was lower. The most modest increase of the consumption expenditure was observed in Latgale (by 17%).

Structure of consumption expenditure by regions in 2006

All
households

Regions

Riga

Pierīga

Vidzeme

Kurzeme

Zemgale

Latgale

Consumption expenditure, average monthlyper household member, LVL

155

201

151

133

141

131

114

Of which (in per cent)

Food and non-alcoholic beverages

28.1

23.9

28.6

29.8

28.7

31.9

37.6

Alcoholic beverages, tobacco

3.3

3.0

3.2

3.4

3.5

3.8

3.3

Clothing and footwear

7.7

8.4

6.2

7.8

7.4

7.3

8.2

Housing, water, electricity, gas and other fuels

12.2

12.3

12.3

10.7

11.9

12.4

13.2

Furnishings, household equipment and routine maintenance of the house

5.8

5.6

5.4

6.2

6.5

6.0

5.6

Health

3.7

4.0

3.3

3.6

3.4

3.3

3.8

Transport

13.1

12.6

15.1

16.5

13.9

12.0

9.2

Communications

6.1

6.4

6.5

5.4

6.3

6.1

5.2

Recreation and culture

7.5

9.2

6.5

6.7

7.1

6.2

4.7

Education

1.4

1.6

1.7

1.3

1.0

1.4

0.9

Hotels, cafes and Restaurants

5.9

7.0

6.7

4.5

5.2

5.0

3.6

Miscellaneous goods and services

5.2

6.0

4.5

4.1

5.1

4.6

4.7

 

Quintile groups are used to characterize the consumption expenditure in households of different levels. They are formed by arranging all households in ascending sequence by income per one household member and dividing them afterwards in five equal groups. One fifth or 20% of all households is represented in each of them.

The average consumption expenditure in the 20% of the poorest (1st quintile) households constituted 90 LVL per one household member monthly. These households spent 35% on food, but on housing – 13% of their consumption expenditure. The consumption expenditure of 1st quintile households comprised 58% of the average household consumption expenditure level. 23.7% of the total country population living in households lives in 20% of the poorest households. One third (34%) of the total number children number in living in households lives in households of the 1st quintile. But the consumption expenditure of the 20% of the richest households (5th quintile), calculating per one household member, was285 LVL; what is 1.8 times above average indicators. This quintile includes 18.8% of the total number of population living in the country households.

Consumption expenditure by quintile groups
(per household member on average in a month, lats)


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1 A household is a person or a group of persons tied by relationship or other personal relation, who live together in the same dwelling and share expenditures.
2 Expenditures on housing rent, payments for water, gas, fuel or other utility payments. Imputed rent is not included.

Prepared by the Household Budget Statistics Section
Tel. 7366998
Lidija Spārīte