Household consumption expenditure rose in households of residents of Riga
The latest data of the Central Statistical Bureau of Latvia (CSB) shows that in 2014 average monthly household consumption expenditure per household member comprised EUR 2991, which is EUR 1.24 or 0.4% less than in 2013. Taking into account increase of consumer prices by 0.6%, consumption expenditure at constant prices reduced by 1.0%.
Rise of consumption expenditure in 2014 continued only in the capital city – in Riga. In 2014 households in Riga spent EUR 377 – 3.3% or EUR 12 more than in 2013.
In 2014 household expenditure in cities grew by 0.1%, on average reaching EUR 322.95 per household member monthly. But household consumption expenditure in rural areas was on average EUR 250 per one household member monthly – 1.9% less than in 2013.
|Household consumption expenditure dynamics in 2008 – 2014 |
(on average per household member monthly, EUR)
Households used increase of disposable income for consumption reservedly. It could be affected by Latvia's entering euro area and economic instability, as well as by other factors. Reduction of consumption expenditure in rural areas were additionally affected by drop of purchasing prices of agricultural products and imports restrictions put by Russia.
Also financial literacy index of the Financial And Capital Market Commission (FCMC) indicates that over a year level of knowledge of population on financial issues has increased and population is creating "safety cushion" in a shape of money savings. FCMC data witness that in 2014 as compared to the previous year deposits of households in Latvian banks have increased by 7% or EUR 335 million.
As price scale changed due to the introduction of euro, in the first half of 2014 households significantly limited their expenditure, but in the second half of 2014 consumption expenditure returned to the level of 2013.
Consumption expenditure composition, structure and changes in 2014 (on average per household member monthly)
Expenditure structure (2014, as %)
Consumption expenditure (2014, EUR)
Changes as % over 2013
Consumption expenditure, total
Food and non-alcoholic beverages
Housing, water, electricity, gas and other fuels
Recreation and culture
Clothing and footwear
Miscellaneous goods and services
Hotels, cafés and restaurants
Furnishings, household equipment and routine maintenance of the house
Alcoholic beverages, tobacco
Households spent more on food which comprised 28% of total consumption expenditure. On average monthly household expenditure on food per one household member reduced from EUR 85 in 2013 to EUR 82 in 2014. More rapidly increased expenditure on recreation and culture (by 11.3% or EUR 2.40), on furnishings and household equipment and routine maintenance of the house (by 8.6% or EUR 1.09), as well as on restaurants and hotels (by 6.7% or EUR 0.89).
Despite the fact that in 2014 consumption expenditure at current prices was lower than in 2008, household expenditure on housing and public utilities, as well as on health has exceeded the pre-crisis level by EUR 9 and EUR 3, respectively. It was affected by a rapid price growth for housing and public utility costs in 2014, as compared to 2008, of 23% and for health - of 18%.
Such main expenses on meeting daily needs as costs on food, housing, transport, clothing and footwear, as well as health constituted more than two thirds (69%) of total consumption expenditure. In general richest (5th quintile2) households for primary expenses could spend EUR 338 per one household member monthly, while poorest (1st quintile) households – EUR 126. For recreation and culture richest households spent 5.7 times more than poorest households.
|Consumption expenditure by quintile2 group, 2014|
(average per household member monthly, EUR)
In consumption area households of salaried persons and entrepreneurs were more active, whose consumption expenditure per household member monthly comprised EUR 311 and EUR 346 respectively, while of retired persons – EUR 249. Households living in rural areas spent 77% of consumption expenditure of citizens (in 2013 – 79%) and 66% of Riga residents (in 2013 – 70%). Out of all households living in rural areas, every second household belongs to the poorest (1st and 2nd quintiles) households, but in Riga – every fourth (28%).
In 2014, the Household Budget Survey of the CSB engaged 3 713 households from different places of Latvia.
More information on the results of the Household Budget Survey 2014 will be available in the CSB database in section “Household budget” from 28 August.
1Out of total household consumption expenditure, expenditure in cash rose by EUR 0.73, but in kind – reduced on average by EUR 1.97 per one household member.
2Quintile groups are formed by arranging all households in ascending sequence by income per one household member and dividing them afterwards in five equal groups.
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