Household consumption expenditure in 2009

16.07.2010

Results of the Household Budget Survey compiled by the Central Statistical Bureau of Latvia on consumption expenditure of private households1 show that in 2009 reduction of consumption expenditure was recorded for the first time, and its volume has fallen slightly below the level of 2007. Structure of consumption expenditure of households, due to their adaptation to the reduction of economic resources, has changed.

In 2009 household consumption expenditure on average per household member monthly comprised LVL 195, adecrease of16% or LVL 37 if compared to2008. The reduction in 2009 is rather similar in both urban and rural areas.

Decrease of consumption expenditure at constant prices was slightly higher – 19%, because consumer prices during a year grew by 3.5%.

Changes of household consumption expenditure and consumer price index (CPI)
(as % of previous year)
 

Consumption expenditure still was higher in urban households, where it comprised LVL 212 per household member monthly (in Riga (capital city) - LVL 236).

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

 

All households

Urban

Riga

Rural

2007

200

219

243

161

2008

232

253

285

188

2009

195

212

236

159

2009 over 2008, %

84

84

83

85

Structure of consumption expenditure in 2009, if compared to 2008, has changed in almost all groups. Main priority of the household consumption expenditure was food - on average 26.7% of all consumption expenditure, and share of this group in all consumption expenditure, if compared to previous year (25.6%), has increased. Rise of the share on food in household consumption expenditure is always considered as negative fact. In the meantime, expenditure on food has reduced from LVL 59 to LVL 52 on average per household member monthly (reduction of 12%).

Households saved on expenses for clothing and footwear (this expenditure diminished by 42%), expenditure for restaurants, cafés and hotels - by 34%, as well as expenditure on furnishings, household equipment and routine maintenance of the house. Expenditure spent for transport dropped significantly - by 25%.

In the same time, households had to spend more on housing2, water, electricity, gas and other fuels. This expenditure has grown by 9%, and that mainly is related to the growth of tariffs of these services. Same increase witnessed expenditure on education, consumer prices of which during a year rose by 18%. But decrease of the expenditure on health (by 6.5%) was influenced by the consumer price growth by 18%.

Generally on average in all households such main expenses as costs on food, housing and public utilities, transport, clothing and footwear, and health constituted two thirds (66%) of total consumption expenditure.

Structure of household consumption expenditure in 2008 and 2009
(in per cent)

2008

2009

 

According to the survey data the lowest consumption expenditure was observed in Vidzeme and Latgale, where it did not exceed LVL 164 per household member monthly. Still, the consumption expenditure of households in capital witnessed the most rapid reduction (by 17%), but especially in Pierīga region (by 23%).

When examining consumption expenditure within socio-economic groups, it may be concluded that comparatively better situation was observed in households of entrepreneurs and self-employed, where consumption expenditure reached LVL 232 (on average per household member monthly). But this group of households was the one subjected to the most rapid reduction of the consumption expenditure – by 21%. In the meantime, consumption expenditure in households of pensioners practically retained the level of 2008 (LVL 157 per household member monthly).

Quintile groups3 are used to characterize the consumption expenditure in households of different income levels. One fifth or 20% of all households is represented in each of them. In 20% of the poorest households (1st quintile) the average consumption expenditure constituted LVL 118 per household member monthly. These households spent 32% on food, but on housing – 17% of their consumption expenditure. The consumption expenditure of 1st quintile households reached 61% of average household consumption expenditure level in the country. 25% of the total country population living in households lives in 20% of the poorest households. Data of 2009 show that the most significant reduction of consumption expenditure did not witness the poorest households, but mainly households in 3rd-5th quintile groups, in which in previous years the share of economically active population was high. It may be related to the lowering of employment rate. Most notable decrease of consumption expenditure was recorded in 3rd and 5th quintile groups - 18% in each. But very insignificant drop was observed in 1st and 2nd quintile groups, 4% and 9%, respectively (if compared to 2008).

 

Consumption expenditure in quintile groups in 2009
(average per household member monthly, LVL)

 

 

Household consumption expenditure (total in cash and in kind)(average per household member monthly)

 

All households

Urban

Rural

2009, LVL

2009 over 2008, %

2009, LVL

2009 over 2008, %

2009, LVL

2009 over 2008, %

Consumption expenditure

195.27

84.1

212.26

84.0

159.40

85.0

Food and non-alcoholic beverages

52.04

87.7

53.84

88.0

48.25

87.1

Alcoholic beverages, tobacco

7.11

96.4

7.33

95.0

6.65

100.2

Clothing and footwear

10.40

57.6

11.84

59.0

7.34

53.8

Housing, water, electricity, gas and other fuels

30.22

109.5

35.18

109.2

19.75

111.4

Furnishings, household equipment and routine maintenance of the house

10.18

71.0

10.88

70.4

8.69

73.0

Health

10.34

93.5

11.23

91.7

8.46

99.2

Transport

25.51

75.1

26.27

75.5

23.92

74.2

Communications

9.86

91.6

10.69

90.4

8.11

95.3

Recreation and culture

15.70

81.2

17.63

79.7

11.62

87.1

Education

3.52

108.8

4.21

105.6

2.07

127.6

Hotels, cafes and Restaurants

8.46

65.9

9.72

64.8

5.80

71.1

Miscellaneous goods and services

11.93

84.1

13.45

83.0

8.72

88.7

1 Household is person or group of persons who live together in the same dwelling and share expenditures.

2 Expenditures on housing: rent, payments for water, gas, fuel or other utility payments.

3 Quintile groups are formed by arranging all households in ascending sequence by disposable income per one household member and dividing them afterwards in five equal groups.

Prepared by Living Standard’s Statistics Section
Lidija Spārīte
Tel. 67366998