Growth of real wages has resumed in Estonia and Latvia, while in Lithuania, real wages remain on a downward trend, the banks said in their latest SEB Baltic Household Outlook report.
In real terms, Estonia's average net wages and salaries were around 7.5 percent lower in the second quarter of this year than in the second quarter of 2008, and Latvia's were 10.3 percent lower. Lithuanian households have experienced the largest decline in their income level, with real net wages down by 14.3 percent.
"In an effort to maintain their competitive edge in global markets, Lithuanian employers are forced to limit growth in wages. Therefore, growth in wages is slower than growth in labor efficiency and prices," Julita Varanauskienė, a family finance expert at Lithuania's SEB Bankas, said in a press release.
All three Baltic countries recorded an increase in households' financial assets during the first half of this year. In Estonia and Lithuania, this was mainly due to growth in the amount of deposits, which account for the largest part of financial assets. In Latvia, deposits also grew, but at a lower rate than assets in second-pillar pension funds did.
Estonia remained the leader in terms of savings per capita, at 3,410 euros, followed by Lithuania with 2,652 euros and Latvia with 2,026 euros.
"However, interest rates, which are currently at their record lows, are not attractive to depositors and are causing changes in households' behavior as they do not encourage them to conclude agreements on deposits with agreed maturity," Varanauskienė said.
The report noted an increase in the cash to deposits ratios in all three countries. Estonia's ratio of cash to deposits with financial institutions was 9.7 percent in the middle of this year. In Lithuania, it was 22.4 percent, and in Latvia, it was 33 percent.
