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The situation in the labor market is stabilizing faster than elsewhere
Ž. At the beginning of the report, Maurice said he had two key messages today. The first, he said, is that economic activity is high enough despite the threat of a second wave, and the second is that pandemics come and go, but stimulus measures are lagging behind.
Speaking of the situation in general, the economies assured that Lithuania can be said to have successfully overcome the first two stages of the COVID-19 crisis: the health crisis and the liquidity crisis. According to him, the number of cases in Lithuania has never exceeded the EU average, which allowed us to be fearless and open the economy faster.
“These two crises have been managed quite well and the short period of time has meant that we are going to deal with the third crisis: the crisis of bankruptcy and unemployment.
As an example, the dynamics of the number of insured shows that in the summer months, the number of insured in June and July is lower than last year, but higher than in 2018. This increase is gratifying, especially since the number of people in Downtime has been reduced to almost zero, ”he said.
Also Ž. Mauricas emphasized that Lithuania ranks fourth in the OECD management ranking of the first COVID-19 herd.
“It just came to our attention then. On the other side of the barricades are Spain, the UK, France, Italy.” These are countries with a high number of cases and a stricter quarantine, “he said.
“This time, unlike many previous crises, we lead. Other countries have looked to us to learn how to manage risks successfully. This has allowed the economy to return to normal.
As for the second wave, why are we more optimistic about the future, since its impact on the economy is less than the first? Here in Israel, where the second wave began, we see that economic activity has fallen very slightly and has quickly returned to even higher levels. Governments promise that no new quarantine will be introduced, but will take other steps to control the virus. Another factor is that the number of deaths is still low, the pandemic is no longer as deadly as it was during the first wave, ”said the economist.
According to him, Lithuania has already worked a lot in the summer, in mid-June, when the economy opened.
“It has helped to do the job that others are just beginning to do: recover workers from downtime,” he said, but added that unemployment in the country continued to rise.
“What is the level today is hard to say, I think we will see a stabilization in August and September and maybe not a drop this year, but the unemployment rate should remain stable at around 9-10% and should start to fall. next year”.
Meanwhile, data from the Employment Service show growth. There are all the people who sign up, and sign up for an additional job search allowance and 200 Eur ”, he said, but summed up that it can be said that compared to other EU countries, the situation on the labor market in Lithuania it is stabilizing faster.
The economy will grow
The economist also explained that during this crisis, Lithuania avoided a drop in wages. According to him, global annual wage growth remained positive.
“It has fallen slightly in the private sector since the beginning of the year, but it has risen in the public sector, which has compensated it and we have practically no decrease in wages since the beginning of the year,” he said.
Therefore, this time, unlike in 2009. or during other crises, we do not and will not see a wave of emigration. Due to the fact that our economy is recovering faster than other countries, other countries still have a lot of downtime, there are travel restrictions, etc., such as the pull factor to the West is weak and the situation in Lithuania is not bad either. From an emigrant state, we cannot, well, say that we have become a magnet for emigrants, but at least we do not stand out in the context of Central Europe. This is a big change, ”he said of emigration, adding that the fact that the Lithuanian economy was shrinking at least across the EU may also have had an impact.
“Variation of GDP in the first half of 2020 is less than 0.8 percent,” he said. Also Ž. Maurice explained that Europe has a recovery of K (form of “Christmas”).
“Northern and Baltic countries are V-shaped, Western Europe is U-shaped, southern Europe-L, and Russia has a left slanted bar,” he said.
“Clearly, one of the reasons was that our domestic consumption fell slightly and was surprised by extremely good consumer expectations. Maybe that’s what we’ve been doing since 2014. We are talking about a crisis. Of course, it helped that there was no drop in wages, since the companies’ focus was not on reducing costs but on transforming companies. “Companies did not dare to cut wages, and we went up and consumer confidence is high, we are high in the EU after Sweden, Denmark and Finland,” he said.
The economist also predicts that inflation will reach 1.4 percent this year, the unemployment rate should reach 8.6 percent, and the average salary will increase by 6.5 percent. According to the economist, GDP growth should reach 4.4 percent in 2021 and 4.2 percent in 2022.
“The reason pandemics come and go, and the economic stimulus remains,” he said.
The housing market was not affected
Speaking of the real estate market, the economist assured that the COVID-19 crisis did not make a great impression on this market.
“There were rumors that prices would start to fall, but we can see that rental prices in Lithuania have not adjusted.
In terms of activity, we see that the number of apartments sold in Vilnius is 2018. level, ”said the economist.
According to him, Lithuania was also interesting because prices in hotels and restaurants and the public catering segment did not fall with us.
“It just came to our attention then. We see that the activity has recovered very quickly, with different segments feeling that effect differently. What depended on tourism, events, they suffer, but what depended on local customers, really they don’t complain, ”he said, summing up that it can be said that the crisis in Lithuania ended without starting.
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