In the second quarter of 2015, the average net wage was EUR 554, by EUR 23 or 4.3% greater than a year ago. Whereas the general level of prices, in spite of more expensive services, has dropped by 0.7%.
According to Julita Varanauskiene, SEB Lithuania Household Economist, growing average income had a different effect on households. The number of the lowest earning households that spend their entire monthly income has decreased by 1 percentage point. Meanwhile, the number of the highest earning households that spend their entire monthly income has increased by 7%age points. In August 2014, 27% of the polled earning the highest income said they spend their entire monthly wage, while in August 2015 the number stood at 34%.
Retail trade volume increase proves that consumption is growing. Retail trade volume was by 14.7% higher in the second half of 2015 compared with the first three months of the year.
According to the SEB bank expert, retail trade volume may grow in the future due to the increase of the monthly minimum wage, because the biggest share of consumption expenditure by people who earn the minimum wage goes on food products.
As the motivation to save declined, the loan portfolio grew. The worth of housing credit in the second quarter of 2015 grew by EUR 81.4 million, while consumer credit – by EUR 17.5 million.
Varanauskiene said that people tend to spend more not only due to improved expectations and greater income but also due to lower savings profitability – due to small interest rate savings earn close to nothing.
