SIMILAR ARTICLES

Hazard warning signal on scoreboard – Current account deficit has already increased to 3.24% of GDP

The current account of the balance of payments recorded in the first nine months of this year a deficit of EUR 6.62 billion, about 39%… Mai mult

Real public investment beyond defence expenditure

Nearly half of public investment that burdens this year’s statistics have been made by the Ministry of National Defence (MApN), according to the detailed data… Mai mult

Industry and robotics: Romania grows annually by three industrial robots per 10,000 employees

The number of robots in the Romanian industry has increased to 18 robots per 10,000 employees (2017), according to the International Federation of Robotics (IFR)… Mai mult

Taxation on past / Profits of Romgaz and Transgaz decline – State asks for increasingly higher dividends for past years

The state demands increasingly higher dividends from reserves and previous results of Romgaz and Transgaz, even though their profits in the first nine months of… Mai mult

Labour tends to zero in terms of contribution to potential GDP. When employment rate increases but does not converge

The employment rate of Romanian population aged between 20 and 64 years was 68.8% last year, according to data released by Eurostat. This figure was… Mai mult

Cronicile

Q2 / Average monthly income per capita in Romania has risen to nearly RON 1,600: Changes in redistribution of family budget

de Marin Pana , 15.10.2018

Data published by INS for the second quarter of 2018 show that Romanians’ monthly incomes have reached nearly RON 1,600 per person.

They were RON 4,151 per family and RON 1,589 per family member. It is noteworthy that money earned per person increased by almost 29% compared to the same quarter of the previous year, while in-kind incomes declined by about two and a half percentage points.

Significant warning for the sustainability of the income growth over the last four years, the comparison between the advance of a person’s earnings since 2014 (64.3% adjusted for inflation, for a fair comparison) and the 25% GDP growth (including the four percentage points of the first half of 2018) shows a major gap.

*

  • Evolution of monthly incomes of households and individuals in Q2 (RON, 2014-2018)
  • Q2
  • Total per household
  • Total per individual
  • Cash income per household
  • Cash income per individual
  • In-kind income per household
  • In-kind income per individual

*

Wages significantly consolidated their preeminent position in the total income structure in a household and reached up to 67.5%. The increase in the last four years has been fulminating, with an increase of 16.3 percentage points (pp.), of which almost 40% in the last 12 months analysed by the INS.

In contrast, the share of in-kind incomes had a visible decline, considerable for the fourth consecutive year, and fell to less than half of the value registered in 2014 (7.4% in Q2 2018, compared to 14.9% in Q2 2014). Agricultural incomes also suffered a similar decrease (-44%), down from nearly four percentage points to just 2.2%.

Contrary to public rhetoric, the share of income from social benefits in the total income of a person has also diminished significantly. Out of the six percentage points lost over the last four years, more than half have “evaporated” in the past 12 months (-3.3 pp. between Q2 2017 and Q2 2018). The explanation is that this type of revenue, although on a rising trend, has evolved below the growth level of the wage income.

The evolution reflects a growing integration into the capitalist production relationships, based on the commodity production and the use of employed labour for this purpose, simultaneously with the decrease in the self-consumption share, specific to the feudal society. As well as the pressure to relieve the labour costs from social protection obligations in order to maintain competitiveness.

*

  • Evolution in the structure of total households’ incomes in Q2 (% of the total, 2014-2018)
  • Type of income
  • Salary incomes
  • Social benefits
  • In-kind incomes
  • Agriculture incomes
  • Incomes from independent activities
  • Property income and from assets sales
  • Other income

*

Incomes from independent activities (-0.2pp) and incomes from property and asset sales (-0.3pp) declined in terms of their importance in the family budget but at a slightly more weighted rate, while the amounts from other expediencies reduced by one third their relative importance (from 1.8% in Q2 2014 to 1.2% in Q2 2018).

How costs have been redistributed

Money saved as a result of lower food prices (more than six percentage points as a share in total) were redistributed mainly to clothing and footwear (+2.3 pp.) and to furniture, endowment and home maintenance (+1.9 pp.). It is noteworthy the diversification of products and services accessed by the population (the share increased considerably in the last four years, from 3.8% to 5.2%).

This evolution reflects an increasing convergence with the Western lifestyle, as the incomes increase. Changes in the structure are a proof of an improvement in the living standards (material and quantitative, rather than spiritual and qualitative), despite the relatively frequent clichés that the current economic growth would not be felt in the population’s pocket.

It should also be noted that, in the context of robust wage increases meant to stimulate the domestic demand, the income growth has led to a significant reduction in the importance of the spending on housing, water, electricity, gas, and fuels, the second important cost group, which had reached a local maximum level in 2015-2016.

*

  • Evolution in the structure of the consumption spending in Q2 (% of the total, 2014-2018)
  • Type of consumption
  • Agrifood products and non-alcoholic beverages
  • Alcoholic beverages and tobacco
  • Clothes and footwear
  • Housing costs, water, electricity, gas and fuels
  • Furniture, endowment and home maintenance
  • Health
  • Transport
  • Communications
  • Leisure and culture
  • Education
  • Hotels, coffee shops, restaurants
  • Various products and services

*

Unfortunately, an aspect that needs to be analysed very seriously by decision-makers, health has moved around in circles and education has seen a decline in the share of a family budget.

That, in spite of the fact they did not hold anyway a very important spot before either. Furniture and various products and services might be modern and useful, but the reversal of the relative importance in relation to health should give food for thought.

Mergeți în homepage ›

Publicat la data de 15.10.2018

Lăsați un comentariu


NEWS

Sovereign Fund gets legal base. Details announced by Minister Teodorovici

The Government adopted on Thursday the ordinance that provides for the general framework for the establishment of a Sovereign Fund. Later, after new talks with… Mai mult

Ford is looking for 1,700 employees to produce EcoSport SUV model

The representatives of Ford Craiova met on Wednesday with mayors of 30 localities from Dolj county in order to stimulate the attraction of 1,700 new… Mai mult

Development strategy / Government squeezes even investment money from its own companies: EUR 120 million from only two entities in energy field

Nuclearelectrica (SNN) and Romgaz (SNG) have calculated the additional dividends to be paid to the state after the Ministry of Finance (MFP) sent to the… Mai mult

DNA, officially: Senate President is suspected of having received a USD 800,000 bribe. Case file opened at a request from Austrian judicial authorities

The case file in which the DNA requested the waiving of the Senate President’s immunity was opened at the request of Austrian judicial authorities and… Mai mult

Illegal state aid / European Commission demands Romania to recover EUR 60 million from CE Hunedoara

Romania has to recover illegal state aid worth EUR 60 million granted to Compexul Energetic Hunedoara, announced the European Commission with a statement released on… Mai mult

Ministry of Finance planned loans of RON 4.74 billion in November. Costs are increasing

The Ministry of Public Finance (MFP) intends to borrow in November RON 4.74 billion, 1.4% more than in the previous month, according to the Ministry.… Mai mult

New 100% Romanian tractor has been launched. Features, endowments, price

IRUM Reghin launched the first 100% Romanian tractor, announced Digi24, designed and built by the company’s engineers, 15 years after the Romanian tractor manufacturing disappeared.… Mai mult

Romanians from abroad sent as much money to Romania as Government attracted from European funds and subsidies

Romanians working abroad sent EUR 2.695 billion to the country in the first eight months of 2018, equalling the European funds and subsidies received in… Mai mult

Bucharest Stock Exchange: European record increase of reference index, old liquidity issues

The main index of the Bucharest Stock Exchange (BVB), BET, registered the second highest increase in the European Union (8.5%) in the first nine months… Mai mult

Estimates of Capital Economics: GDP is losing speed in Q3 as well, growth could be reduced to 3.5%

The first estimate of the economic growth in Romania in the third quarter shows a reduction down to 3.5% (year-on-year), after the previous quarter's Gross… Mai mult

Mugur Isarescu - BNR: Wages should increase by market forces not by politicians

Wage increases should be based solely on productivity growth and be made "by market force", not by politicians, the Governor of the National Bank of… Mai mult

OMV postpones decision to assume an investment in natural gas from Black Sea for next year

Austrian OMV Group postponed its decision on the Black Sea investment for next year, in the context of the offshore law adoption being postponed, Reuters… Mai mult

Justice Minister initiated procedure for dismissing General Prosecutor

Minister of Justice announced on Wednesday that asks for the dismissal of General Prosecutor Augustin Lazar (photo) for 20 reasons (they could be more, Tudorel… Mai mult

Eurobarometer / Romanians who believe that EU membership is a good thing have lost majority position

  The last Eurobarometer of the European Parliament, published in September, shows that 49% of Romanians consider that EU membership is a good thing. Compared… Mai mult