Wages in Latvia are increasing faster than prices, signaling a potential boost in public purchasing power after a two-year drop, shared Mārtiņš Āboliņš of Citadele bank. The Central Statistical Bureau’s Q2 2023 report showed an average gross monthly salary of EUR 1,525 and net of EUR 1,114 – an impressive 11.7% annual increase compared to a modest 0.1% in consumer prices. Neighboring Lithuania and Estonia echo this wage growth. Although wages now grow faster than prices, the 30% price surge in the past 2.5 years means catching up will take time. Andrejs Migunovs from the Bank of Latvia added that Latvians need time to restore the purchasing power they lost since 2022, even if real wage reductions halt.
Given Latvia’s below-average EU income level, Āboliņš foresees wage growth continuing, especially with historically low unemployment rates. He predicts a stiffer recruitment battleground and, within 3-4 years, an average salary surpassing EUR 2,000 before tax. However, due to a recent economic slump, there’s speculation businesses might adopt a more cautious stance, potentially tempering wage growth.