People in Lithuania are spending 63.9% of their income on essentials, like food and housing, according to the latest Eurostat data. The expenditures have increased by 50% compared to 2016.
“The year 2021 was an unusual year in terms of consumption, as Covid-19 led to a reduction in tourist trips and fewer events,” said Inga Masiulaityte-Sukevic, deputy director of Lithuania’s Statistics Department.
The average monthly expenditure of urban residents amounted to 461 euros, while rural residents spent 393 euros.
“Food and non-alcoholic beverages account for the largest share of consumption expenditure in both urban and rural areas,” said Masiulaityte-Sukevic.
Over the five years, the biggest increases have been in transport, restaurants and hotel services. The smallest increases were recorded for alcohol, tobacco products and recreation and culture.
In 2021, food and non-alcoholic beverages – excluding money spent in cafes and restaurants – accounted for almost 30% of total consumption expenditure, amounting to 131 euros per person on average. Over five years, spending on food at home increased by 40.3%.
By contrast, spending in restaurants and cafes – including on takeaway food – doubled over the five years to an average of 22 euros per person per month.
Expenditure on housing, electricity, gas and other fuels, and water amounted to 67 euros per person per month. Compared to 2016, these costs increased by 58.8%.
Evaluating the data, Jekaterina Navicke, associate professor at the Department of Social Policy at Vilnius University, argued that life in Lithuania had improved over the past five years.
“Prices are rising significantly less than consumption. Income grew by about 70% during this period, and even excluding inflation, income growth was higher than expenditure growth,” Navicke said.
However, people are forced to spend a large chunk of their income on food.
“Europeans spend on average about 16% on food, but we spend almost twice that (30%),” she stressed.
“If a person spends 50% on food, they are in poverty, so it is not far off,” she added.
The distribution of spending in Lithuania also shows inequality is prevalent in the country.
“Consumption in Lithuania, like the distribution of our income, is one of the most uneven in the European Union. People in the 20% least well-off groups live in debt, are unable to save anything and have a savings rate of minus 8-10%,” said Navicke.
“At the same time, people in the top 20% of the population save a significant proportion of their income, and one of the highest in the EU – around 50%,” she added.
However, it will be difficult to save money in the current period.
“Inflation is outpacing income growth this year,” said Navicke. (LRT/Business World Magazine)
