In an attempt to limit living expenses, Latvian residents have started spending less money on clothes, footwear, housing repairs and medicines, according to results of a survey by Citadele Bank.
Austerity activity in these positions have come back to a level previously observed in September 2022. A representative survey of Latvian residents’ austerity habits was performed by the bank with assistance from Norstat research agency at the end of September 2022, the beginning of January 2023 and the end of March 2023. More than 1 000 Latvian residents aged 18 to 74 years were interviewed.
A comparison of expenditures restriction trends in these three surveys focused on Latvian residents’ austerity habits in 15 different categories. Results indicate that residents were the most cautious with their expenses in September 2022, which was followed by recovery in December. The latest data indicates that in March 2023 residents’ austerity habits became stronger again. In multiple categories restriction of expenses returned to the level of September 2022.
Residents in Latvia mostly saved money on eating out or ordering take-out meals. In September and March this practice was employed by 41% of respondents (40% in December).
Data indicates that in March residents started saving money on purchases of new clothes: while in December this situation was true for 25% of respondents, in March it was true for 32% of respondents, which is an index identical for results of September 2022. Belt-tightening was observed for various housing-related expenses – furniture purchases or repairs were put off by 30% of respondents (24% in December and 28% in September).
Restriction of expenses is also observed for medicines: while in December 3% of residents saved money on medicines, their numbers increased to 6% in March. 12% of residents had to save money on various medical activities (surgeries, examinations, doctor consultations) in March (10% in December).
Survey results indicate that
Latvian residents have had to postpone making savings in the past month.
In December this was confirmed by 21% of respondents (25% in March).
A comparison of austerity habits in December and March, residents have limited various hobby-related expenses, transportation, travel or self-improvement. On average in these categories the number of more financially cautious residents has become 3-4% larger when compared with winter, according to survey data.
At the same time, the tendency of putting off entertainment, such as attending various culture or entertainment activities, is starting to lose its footing – in September 42% of respondents limited such expenses, in December their numbers reached 38%, and in March their numbers reached 36%.
«The recovery observed in December can be explained with Christmas and residents’ plans to purchase gifts. In March residents became more cautious by the increasing EURIBOR rate. Outlook for potential growth remains unclear. This is why an increase in caution for everyday expenses is only logical,» comments Citadele Bank’s Head of Retail Banking Jānis Mūrnieks.
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