The average wage and pension in all three Baltic countries now exceeds the pre-crisis levels; although the purchasing power of workers and pensioners – adjusted for inflation – is still lower than before the crisis, it is nevertheless significantly higher than ten years ago, informs LETA.
In 2013, the actual average wage (with inflation taken into consideration) in Latvia was 57% higher than in 2003. Lithuania recorded a 52% increase and Estonia 50%, according to the latest survey of Baltic households by SEB banka.
The average purchasing power in the Baltic countries was rising 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 residents' purchasing capacity than Estonia during the crisis. Also, wages resumed growth in Estonia already in 2011, whereas in Lithuania, wages only began to increase after the crisis in 2013.
SEB banka’s socioeconomic expert Edmunds Rudzitis explains that Estonia is very close to the pre-crisis level at the moment in terms of workers' income adjusted for inflation. In 2013, the actual wages in Estonia were just 2.2% lower than in 2008. In Latvia, wages adjusted for inflation last year were 5.2% smaller than in 2008, and in Lithuania smaller by 8.8%.
Last year, the average pension in Estonia adjusted for inflation was 70% higher than in 2003. In Latvia and Lithuania, pensions have increased by 68% and 67%, respectively.