Wages recover to pre-crisis levels

  • 2014-05-01
  • From wire report

RIGA - The average wage and pension in all three Baltic countries now exceeds pre-crisis levels, reports LETA. And although the purchasing power of workers and pensioners - adjusted for inflation - is still lower than before the crisis, it is nevertheless significantly higher than it was ten years ago.
In 2013, the actual average wage (with inflation taken into consideration) in Latvia was 57 percent higher than in 2003. Lithuania recorded a 52 percent increase and Estonia 50 percent, according to the latest survey of Baltic households by SEB bank.

The average purchasing power in the Baltic countries rose quickly from 2003 to 2008, propelled by the countries’ accession to the European Union, hopes that incomes in the region would reach the EU average level in the short run, optimistic expectations and the real estate bubble.

Wages in all three countries increased significantly during this period, with wages in Latvia and Lithuania growing faster than in Estonia. However, Latvia and Lithuania also experienced steeper falls in resident purchasing power than Estonia during the crisis. While wages resumed growth in Estonia in 2011, in Lithuania wages only began to increase in 2013.
SEB bank’s socioeconomic expert Edmunds Rudzitis explains that Estonia is very close to the pre-crisis level currently, in terms of worker income adjusted for inflation.

In 2013, actual wages in Estonia were just 2.2 percent lower than in 2008. In Latvia, wages adjusted for inflation last year were 5.2 percent lower than in 2008, and in Lithuania lower by 8.8 percent.
Last year, the average pension in Estonia adjusted for inflation was 70 percent higher than in 2003. In Latvia and Lithuania, pensions have increased by 68 percent and 67 percent, respectively.