52% believe that their finances have remained at the previous level or even improved.
The survey conducted by Swedbank Institute of Finance and research agency SKDS shows that the financial situation has deteriorated significantly for one in six Latvian households, or 15%. At the end of the month, however, the ability to make ends meet before the salary had been assessed negatively by 46%. It can be said that nearly half of the country's population lives from salary to salary.
"It is extremely difficult to put the same amount of income against the current price increases. It's impossible for some at the moment. And the survey shows the tools people use in this situation. And we see that there is an equally large part of the population which has it difficult to make ends meet, which is starting to use their savings,” said Evija Kropa, an expert at Swedbank Institute of Finance.
The financial situation has mostly deteriorated for the population aged 45 to 63, for respondents with basic or secondary education, and for the low-income and unemployed population. Even for those who have had a salary increase, it has been eaten away by inflation.
The end of 2022 is characterized by the greatest drop in purchasing power in this economic cycle. Inflation is stabilizing at the moment, economist Pēteris Strautiņš at Luminor Bank said.
At the same time, 52% of those surveyed acknowledged that their level of well-being has either not changed or has improved. Moreover, the negative sentiment of the population has not yet led to real action, namely a sharp decline in consumption.
“The good news is that, so far, negative sentiment doesn't turn into real action. We still see consumption continuing. Well, there is little concern that prices are rising more quickly than wages, so savings are not growing, some consumer credit is increasing,” said Mārtiņš Āboliņš, economist at Citadele Bank.
Swedbank Financial Institute pointed out that although price increases will continue next year, Latvian residents can count on state energy resources support during the heating season, the increase in the minimum wage to €620, and other forms of support.
