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Not everyone can recover
At the beginning of the Lithuanian Business Forum report, the economist stated that last year there was a lot of discussion about the letters V, U or L of the Lithuanian economic recovery scenarios, but this year the letter K is more and more frequent. discussed.
As he explained, it means that not all sectors will recover as quickly, and some may or may not recover at all.
“We may not dive into the same river twice and after the pandemic the economy will look different than before the pandemic,” Ž. Mauricas.
In a short 2020 review, he said that it was possible to observe a Form V recovery scenario last year as the second quarter. the country’s economy declined, followed by rapid growth and recovery.
“It was a feeling of unity that we all fell together and recovered together,” he added.
The recovery was driven mainly by information technology services, agriculture, industry and the real estate sector.
“They have propelled Lithuania forward and even other sectors that have been affected have suffered relatively less than the EU average.
During the second wave, industrial companies did not suffer because there were no interruptions in the production chain. And, as I mentioned, I was most positively surprised by the real estate market with its tremendously rapid growth, “he said.
“It is also good news that Lithuania has become a country of immigrants from an emigrant country.
We are seeing an increase in the population of the largest cities in Lithuania. Vilnius has been growing for some time, but Kaunas, Šiauliai, Klaipėda and the balance of international migration in 2020 have started to grow. it was positive in almost all municipalities. People are returning to Lithuania and not only to the main cities, but also to the regions, ”Ž said. Mauricas.
Warned of threats
According to the economist, many of the trends listed above will also be observed this year, so according to him, “the Lithuanian economy will not be too bad”, although the American roller coaster will have to be ridden due to the current quarantine.
“Unfortunately, there is a need for quarantine, and of course this is not a thankful time for forecasters, as a possible economic downturn will depend on the length of the quarantine, which is a key criterion,” he said, listing a number of of scenarios.
According to the economist, in the baseline scenario, if the quarantine, or at least most of the restrictions, were lifted in March, only a temporary economic recession, the letter W, would be visible, and in the second half of this year the la la economy would recover rapidly and well above pre-crisis levels.
However, if the quarantine were to be extended until May, he said, a slightly longer and greater economic recession could be expected, but, he said, the pre-crisis level would still be reached and exceeded by the end of the year.
And in a very pessimistic British scenario, when the British applied restrictions for a long time, they did not even have such a free summer, it just meant that the recovery was very slow and slow, and that scenario is relevant for Lithuania. . impacts that are rarely talked about now, but that can materialize, ”Ž warned. Mauric and argued that the first of them – a K-shaped recession.
“If we had a V-shaped recession in the spring, when most economic sectors fell and then rose together, now we are seeing a big divergence.
Some sectors do not see any crisis, others there is no light at the end of the tunnel. If this condition continues into the summer, it can have some irreversible consequences. This is both an increase in the number of bankruptcies and an increase in the unemployment rate, “he said.
Other threats, as noted, are related to migration.
“Migration trends are likely to be positive in the first half of this year, but there are no such guarantees in the second half of the year, especially if we don’t jump on the train and open our economy later than other EU countries.
Another threat is the growth of the underground economy, because due to various economic limitations, it is possible that some activities start in the shadows and it will be difficult to recover them ”, said the economist.
See the possibilities
In terms of change and the letter K, Ž. Mauricas said that the saying here goes that when a strong wind blows, some build walls and other windmills, but Lithuania should look at everything in a positive direction, and there are also many positive things related to this pandemic.
“First of all, the share of online commerce in Lithuania is still relatively small, but there is a lot of potential here. Also, by expanding e-commerce, regions have the opportunity to bridge the gap with big cities. Another thing is to work. from home It is also a great opportunity for our regions.
In addition to these things, the pandemic will change the image of real estate in the country. More houses will be built, especially ecological ones, and the average size of the apartments will increase, because the house will become not only a living space, but also a workspace ”, he said.
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