Data from Statistics Estonia suggests 22.5 percent of Estonia's population lived at risk of poverty and 3.5 percent in absolute poverty in 2022. Compared with 2021, this is an increase of 2.1 percentage points.
At the same time, the share of people living at risk of poverty decreased by 0.3 percentage points.
Epp Remmelg, leading analyst at Statistics Estonia, said the at-risk-of-poverty rate reflects income inequality in a country.
"Close to 303,900 people lived at risk of poverty in 2022, which is nearly 3,000 persons more than in 2021. Their net monthly income, taking into account household composition, was less than €756 euros," she said.
Over the years, the at-risk-of-poverty rate has been highest among the elderly living alone. In 2022, however, the at-risk-of-poverty rate increased the most among families with children, particularly those with three or more children, up by 4.6 percentage points from 2021, the analyst explained, adding that of people aged 65 and over living alone, 79.1 percent were at risk of poverty, down 2.6 percentage points from the year before.
34.8 percent of single parents and 18.6 percent of families with three or more children were at risk of poverty.
"Payments from the second pension pillar in 2021, which raised average incomes and reduced the at-risk-of-poverty rate among children and working-age households, can be seen as a major contributor," Remmelg pointed out.
The at-risk-of-poverty rate was highest in Lääne (34.3 percent), Viljandi (34.3 percent), and Lääne-Viru (33.0 percent) counties, and lowest again in Harju (17.6 percent), Järva (19.1 percent), and Tartu (20.5 percent) counties. The at-risk-of-poverty rate increased the most in Lääne-Viru County (10.3 percentage points), while the biggest drop was recorded in Võru County (8.5 percentage points).
Price advance behind absolute poverty spike
Absolute poverty indicates the share of the population that is not able to meet its basic needs.
"In 2022, nearly 48,000 people lived in absolute poverty, whereas 18,000 people did so in 2021, which means the number has risen by two and a half times. Their net monthly income, taking into account household composition, was less than €303," Remmelg noted.
The analyst said that the increase is due to major price hikes in 2022, which raised the subsistence minimum by a record-breaking 30 percent from €234 to €303. However, incomes, including different types of benefits, did not increase to the same extent in 2022, Remmelg said, adding that benefits have a significant impact on how people on lower incomes cope financially.
For the first time in a long time, retired persons also fell into absolute poverty, as the national pension of €275 in 2022 was lower than the subsistence minimum.
"By age group, the absolute poverty rate in 2022 again increased the most among 18–24-year-olds. This means that one in ten young people lived in absolute poverty last year. More than one in ten lone parent households also lived in absolute poverty," Remmelg added.
Editor: Marcus Turovski