On household consumption expenditure in 2010

15.07.2011

Central Statistical Bureau has compiled results of the Household Budget Survey on consumption expenditure of private households1 in 2010. Economic crisis, which was the severest in 2009, when consumption expenditure reduced on average by 16%, also in 2010 had negative influence on domestic consumption, and as a result of that consumption expenditure of  households diminished on average by 8.8%. It had significant influence on the structure of consumption, as well as on ability of many households to cover necessary expenses in 2010.

In 2010 household consumption expenditure on average per household member monthly comprised LVL 178, and it is 17% less if compared to 2009. In rural areas consumption expenditure in 2010 diminished almost two times faster than in urban areas.

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

The reduction of consumption expenditure in 2010 over 2009 at constant prices was slightly lower - 7.8%, because consumer prices decreased by 1.1%.

Consumption expenditure still was higher in urban households, where it comprised LVL 197 per household member monthly (in Riga - LVL 231). But the most notable reduction of consumption expenditure was recorded in rural areas - in 2010 they were LVL 20 less than a year before.

Household consumption expenditure (total in cash and in kind) in 2008 - 2010
(average per household member monthly, LVL)

 

All households

Urban

Riga

Rural

2008

232

253

285

188

2009

195

212

236

159

2010

178

197

231

139

2010 over 2009, %

91

93

98

87

Under the conditions of economic crisis households spent their resources to meet the basic needs and reduced all other expenditures. In comparison with the year before, household expenditure on food has diminished - from LVL 52 to LVL 50 on average per household member monthly. Expenditure on food still is the main consumption priority in households and comprise on average 28.3% of all consumption expenditure, and, in comparison with the previous year (26.7%), the share of this expenditure in total consumption expenditure of households has grown. It should be noted that the rise of the share of food in household consumption expenditure is always considered as a negative phenomenon.

Compared to the previous year, in 2010 households have considerably diminished their expenditure on furnishings, household equipment and routine household maintenance – by 24%, on recreational and cultural activities – by 21%, as well as expenditure on restaurants, cafés and hotels – by 19%. Moreover, households have reduced their expenditure on transport – by 16% and alcoholic beverages and tobacco – by 12%.

In 2010 the share of households, for which housing maintenance expenditure arise financial difficulties, has increased noticeably. According to the data of the EU Statistics on Income and Living Conditions (EU-SILC) in Latvia the share of households, which find these payments a heavy burden, has risen from 35% in 2009 to 41% in 2010.

But expenditure on clothing and footwear, health has remained at the level of 2009, indicating only small growth. Generally on average in all households such main expenses as costs on food, housing, transport, purchase of clothing and footwear, and health constituted more two thirds (68%) of total consumption expenditure.

Composition and structure of consumption expenditure
(average per household member monthly)

 

All households

2010,

LVL

2010,

%

2010 over 2009,
%

Consumption expenditure

178.01

100

91.2

Food and non-alcoholic beverages

50.47

28.3

97.0

Alcoholic beverages, tobacco

6.26

3.5

88.0

Clothing and footwear

10.55

5.9

101.5

Housing, water, electricity, gas and other fuels

29.02

16.3

96.0

Furnishings, household equipment and routine household maintenance

7.71

4.3

75.8

Health

10.37

5.8

100.3

Transport

21.43

12.0

84.0

Communications

8.96

5.0

90.9

Recreation and culture

12.40

7.0

79.0

Education

3.33

1.9

94.4

Hotels, cafes and Restaurants

6.87

3.9

81.2

Miscellaneous goods and services

10.65

6.0

89.3

Data of the Household Budget Survey show that – the more children in household, the less it can afford to spend. The most difficult situation is faced in households with 3 and more children, in which consumption expenditure equalled to LVL 101 and comprised only 57% of the average level of consumption expenditure in country, calculating per household member monthly.

Consumption expenditure depending on the number of children in household, 2010
(average per household member monthly, LVL)

Quintile groups2 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 consumption expenditure constituted only LVL 103 per household member monthly. These households spent only one third (33%) of their consumption expenditure on food, but almost one fifth (18%) - on housing.

Consumption expenditure in quintile groups in 2010
(average per household member monthly, LVL)

The consumption expenditure of 1st quintile households reached 58% of average household consumption expenditure level in the country. 25% of the total country population living in households live in 20% of the poorest households. The most notable reduction of the consumption expenditure in 2010 was recorded in the 1st quintile group – 13%. But the lowest decrease was observed in the 3rd quintile group (4%, if compared to 2009), which is formed by notable share of population at retirement age.

 

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


1 Several persons living together in the same dwelling and sharing expenditures, or single person managing household separately.

2 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.