Lithuania’s spending has been calculated: the amount of money not spent this year will reach 436 million. euros

We spend 1.5 percent. less than last year

Indrė Čėsnienė, Head of Euromonitor International’s Economic and Consumer Analysis Division, estimated that Lithuania’s spending will be the lowest of all developed countries this year.

According to her, according to current forecasts, Lithuanians will end 2020 spending about 436 million. Eur, or 1.5 percent. less than in 2019.

“But that’s not bad news,” he says immediately. – In the global context, this is the smallest drop in spending among developed countries. By comparison, consumer spending in Germany, the United States and Sweden is projected to fall by around 5-6 percent, while in the United Kingdom, Ireland and Spain, the drop will probably be the largest in the world at 13- 15 percent.

The head of the Economic and Consumer Analysis Division added that total consumer spending will have fallen more drastically than in Lithuania in neighboring Latvia and Estonia, where the drop will reach around 4-5 percent. However, in general, such a drop in spending in these countries, as well as in Lithuania, has been and will be greatly affected by the pandemic.

“The main reason is pandemic and quarantine restrictions. Also, during periods of greatest uncertainty, people have to postpone certain purchases and save more, which is what we are seeing in record deposits in banks.

The analyzed consumer spending includes the amount of goods and services consumed in Lithuania. In this case, foreigners are also included in the Lithuanian statistics, but the additional costs are only spent directly in Lithuania, that is, consumers must be physically present in Lithuania and buy goods / services here, and these consumption costs do not they include the direct costs of Lithuania abroad ”, he clarified.

Mentioning the cost of which Lithuanians saved the most this year, the specialist named rest and recreation.

He said that although the year is not over yet, forecasts show that Lithuanians will cut most spending on recreation and recreation (-13%), transportation (-10%), household items such as furniture and appliances (-9 %), and hotels and restaurants (-7%).

And here are the biggest increases: food (about 10%), alcohol and tobacco products (almost 5%), and utility bills like electricity, gas, water.

“In neighboring countries, the situation is similar, except that Latvians and Estonians spend less money on alcohol and tobacco than Lithuanians. This difference is often visible during economic difficulties: Lithuanians spend more on alcohol and tobacco, while their neighbors save at the expense of these unnecessary assets, ”said I. Čėsnienė.

In his opinion, even after the end of the pandemic, Lithuanians will not return to the same spending structure as in 2019.

“Rising housing costs will continue as working from home will continue to be popular. As a result, transportation costs will continue to fall. As more time is spent at home, the cost of restaurants will remain low and cost of food will be higher. Meanwhile, spending on larger purchases, such as furniture, appliances and cars, should recover quickly, “he predicted.

Less spent on services

Sigismund Mauricas, an economist at Luminor Bank, also said there have been changes in people’s pockets and how money was spent during the pandemic, and it is still happening.

“Everyone thought that when the crisis hit, people would cut costs for all sectors, but they didn’t stop spending so much, they distributed their basket very quickly,” Ž explained. Mauricas.

According to him, cash flows from the service sector quickly shifted to other sectors.

“It was very surprising that most of the companies in the retail sector had extremely high turnover, and some of them even more than expected at the beginning of the year or at the end of last year. I mean the entire pandemic period from March to November.

In October, retail sales grew more than 10% compared to October last year, so I don’t know what people thought, maybe the epic is coming, but it was the biggest growth in October since 2007. ” a huge redistribution of money from services to the goods sector.

“The companies that operate in the product category, it can be said roughly, practically did not feel the crisis. That trend is in the Baltic states, Scandinavia, Poland and Germany, perhaps a little less.

However, if it weren’t for the coronavirus crisis, I think consumption in Lithuania would have grown very steeply, more than 5%. and, apparently, this growth is partly explained by the emigrants who returned to the country ”, Ž. Mauricas.

According to him, during the quarantine several emigrants returned to Lithuania, who have lived and worked abroad until now, and today continue their work from home in Lithuania.

“Their activity in the retail market was high.

Formally, the emigrants may not have returned yet. They may still be registered in other countries where they work, but I think the actual migration figures will be different this year and when the statistics are updated next year, there will be an impressive jump, we will have more than 20-30 thousand. citizens and a positive balance of migration ”, he predicted.

It is no secret that Lithuanians saved a lot of money during the quarantine. According to Delfi, since the beginning of the first quarantine in March, the amount of household deposits has increased by 1.4 billion. Eur is still the largest in history today. Ž. Maurice said the main reason for this was increased income.

“Revenues increased significantly and there was also a lot of inertia from last year,” he said.

Speaking about what to expect for consumption after the end of the pandemic and whether people will start spending the money and a real explosion in consumption can be expected, the economist said there should not be a boom.

“It just came to our notice then. There will only be a redistribution (cash flow) from goods to services. Some services will recover quickly enough, others will not. The question is how much the prices of certain categories of goods will fall,” said the economist. .

The money was spent on local resorts and emails. in stores

Virgilijus Mirkės, director of Revolut in Lithuania, also spoke about the changes in spending of Lithuanian money observed during the pandemic.

“We have definitely seen a reduction in people’s spending abroad.

The number of Revolut customers traveling to other countries was cut almost in half in March-October this year, by 42 percent. “If we compare it with the same period last year,” he said, assuring that the majority of people who traveled outside of Lithuania used the Revolut card in neighboring Poland and Latvia.

According to the manager, the number of people traveling to traditional holiday destinations in southern Europe – to Italy, Spain, Turkey – decreased the most, but the expenses of the Lithuanian population in local resorts increased significantly.

“In Klaipeda, compared to the same period last year, our customers spent 110 percent. More, in Neringa – 95 percent, in Palanga – 89 percent, in Biržai – 83 percent. More,” he said.

According to V. Mirkė, the pandemic also affected the purchases of the population, which moved to the Internet.

“Although in March-October this year, residents spent 20% of their time on physical payments with the Revolut card in Lithuania. More than at the same time last year, settlements in physical locations abroad during the pandemic decreased almost 50 percent.

And here e-commerce has experienced a real boom: the amount of spending of the population in Lithuanian e-mail stores grew by almost 140 percent, foreign e-commerce. in stores: 48 percent, ”he said.

It is true that I. Čėsnienė, Head of Euromonitor International’s Economic and Consumer Analysis Division, provided similar statistics.

“It seems that e-commerce in Lithuania will grow around 50 percent this year.

The growth of e-commerce will continue in the long term, as people who have tried and gotten used to buying online will tend to return to physical stores less often, “he said.