In 2017, the cost of the weekly food shop rose to the highest level in the past 25 years, reaching 73 euros. However, this does not indicate a worsened subsistence of Estonians; in fact, the growth rate of incomes has far outpaced the cost of food shopping.
As of September 2017, the cost of a 4-member family household food shop in Tallinn, the capital of Estonia, was 72,99 euros. Compared to September 2016 the price of the food basket rose by 6,5% or 4,48 euros, according to the Estonian Institute of Economic Research.
“Price levels, including food prices, have doubled within last 25 years, albeit the average gross salary has multiplied by 8 times and the average pension 9,5 times during the same period,” explained Liis Elmik, a senior economist at Swedbank.
“Nearly a quarter of families’ monthly spend goes towards food, on average 21 percent. In 1993, 25 years ago, it was 43,5 percent,” she adds.
In 2016, families with the lowest income spent 34 percent on food, and those with the highest income spent 11 percent. In the same year, a member of an Estonian household spent on average 86 euros on food per month. This is 36 percent more than, for example, in 2010.
Marje Josing, director of the Estonian Institute of Economic Research, agrees that in the course of time, incomes have risen more than the cost of food shopping and people’s welfare has improved over the past 25 years as a whole. “You could say that Estonians, on average, have never lived better,” she claims.
“Everything costs more than 25 years ago but when we look at the salaries, in 1992, it was 60 euros per month. Currently, the average salary is 1200 euros, and therefore 60 euros would be unrealistic. Most people’s income has grown much faster than spending,” says Josing.
Additionally, pensions have risen faster than prices. “You could say that pensioners are in a better situation too, many of them work or receive support from their children.”
According to Liis Elmik, a senior economist of Swedbank, poverty in Estonia is more common amongst single parents and people that live alone. Unfortunately, many cannot work due to health or family reasons, or there are no available jobs in the region. Their income falls and they feel the rise in food prices more dramatically.
Marje Josing calculates, if food prices rise on average 7-8 percent per month, then pensioners with a monthly 450 euros income, spend 30 percent of that amount on food. In this case, people perceive the rise in food prices more sharply, that is, in comparison to people who earn 3000 euros per month and spend less than 10 percent of their income on food.
*The original article was published in an Estonian magazine 60+
Katre Pilvinski 