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The economic and social impact of alcohol consumption in Latvia


24.11.2023 - In a new analysis, Latvia has confronted the economic and social impacts of alcohol consumption head-on. The first of its kind in the country, this study, commissioned by the Ministry of Health, provides a stark illustration of the burden that alcohol places on society and the state's coffers. The results, which are alarming yet crucial for future policy-making, show that alcohol-related costs in Latvia are not just a public health issue but a significant economic concern.


Alarming financial toll on public sectors

In 2021 alone, alcohol abuse cost Latvia EUR 149.7 million, accounting for 0.45% of its Gross Domestic Product (GDP). These expenditures span various sectors, from health care and law enforcement to social assistance. Specifically, the health sector bore costs of EUR 56.6 million (2.7% of total health expenditures), law enforcement faced EUR 47.7 million in expenses (6.5% of public order and security spending), and social assistance costs stood at EUR 44.8 million (0.97% of social service expenditures).


The Indirect Economic Costs

Beyond direct costs, the study conducted by the Baltic International Centre for Economic Policy Studies also highlighted substantial indirect costs. These ranged between EUR 290 and 452 million, equivalent to 0.9% to 1.3% of Latvia's GDP. These figures arise from alcohol-related unemployment, reduced economic activity, incarceration, illness, and diminished work capacity, painting a comprehensive picture of the far-reaching impact of alcohol abuse.


The total direct and indirect costs of alcohol abuse in 2021 amounted to 1.3–1.8% of GDP.

To compare, in 2021 revenues from excise tax on alcoholic beverages accounted to 0.7% of

GDP.


Life and quality of life lost

Perhaps the most poignant finding of the study is the loss of up to 88,620 years of life in 2021 due to alcohol-related harm. These years, which could have been lived in good health and quality, underscore the profound personal and societal impacts of alcohol misuse.


Proposed measures for reduction

The study suggests several measures that could alleviate these costs. These include reducing alcohol sales times, especially in the evenings, raising the minimum alcohol purchase age to 20, increasing excise tax rates, lowering permissible blood alcohol concentrations for drivers, and restricting alcohol advertising. Such measures, the study posits, would significantly impact the state budget and societal costs.


Latvia stands at an alarming threshold, recording the highest absolute alcohol consumption among OECD countries – 12.2 litres per inhabitant. This consumption is linked to over 200 diseases and diagnoses, including liver diseases, trauma, malignancy, and cardiovascular diseases.


Health Minister Hosams Abu Meri emphasizes the need for a multifaceted approach. "Alcohol consumption is a significant cause of morbidity and premature death," he notes, advocating for a combination of legislative initiatives and public outreach. These efforts aim to change legislation, alter societal habits, and enhance public health awareness.


This comprehensive study serves as a crucial tool for the Latvian government, aiding in advancing political initiatives and justifying the need for funding to implement effective public health policies. As Latvia grapples with these findings, the hope is that these insights will pave the way for significant, positive changes in both public health and economic sectors.


Sources: The report in FULL LSM.lv

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