Economists warning: prices could become more and more striking

According to Swedbank economist Greta Ilekytė, comparing May and June, accommodation services became more expensive in Lithuania, i. and. rural tourism rural houses: about 27 percent. (Hotels in cities fell about 7 percent) and about 12 percent. Dental services prices became more expensive, and overall service prices increased approximately 5% during the year. Due to changes in oil prices, according to the economist, the prices of some food products, fruits and vegetables have decreased.

“Basically, the atmosphere is that if prices go up, it is bad. If it increased a lot, it would be bad, but currently average inflation is around 1 percent, so if we look at Estonia and Latvia, where inflation was lower , the general economic recovery is much slower than in Lithuania ”, says the economist at Delfi diena.

“I would emphasize that falling prices and low prices are a characteristic of poorer countries, it has nothing to do with prosperity. In most cases, when the prices of goods services rise, they also do so. wages ”, he adds.

Meanwhile, Luminor chief economist Sigismund Mauricas disagrees that Lithuania is recovering faster or less affected by the coronavirus crisis than Latvia and Estonia.

“Looking at the spring data, in March-May retail sales volumes decreased less in Latvia, Estonia – by 4%, in Lithuania – by 7%, because quarantine conditions in Lithuania were relatively stricter. We can say exactly the same thing about services. There were fewer restrictions in Latvia. On the contrary, I would say that Lithuania is still catching up, “explains the economist.

“Lithuania and the region as a whole are distinguished by growth in service prices. There are several reasons: costs, the minimum wage grew faster in Lithuania this year, another factor, we see a trend since 2015 that prices for Services in Lithuania are growing faster each year than in Latvia and Estonia.

And that’s not necessarily good news, because we can open our eyes soon and see that we are the most expensive state. And it will be a great challenge for Lithuania, because we will lose its appeal. Already a large number of tourists prefer the Latvian coast, ”says Ž Mauricas.

Prices hungry eyes more and more?

G. Ilekytė emphasizes that during this period the savings of the population must be treated with enough caution: “It is not known if there will be a second [koronaviruso] banga If so, you should be saving. “

According to Ž. Maurico, if the economy does not recover quickly enough or the second wave of the pandemic arrives, the challenges will be even greater.

“Average wages in the private sector are not growing, which means that the purchasing power of the majority of the population is decreasing,” he explains in Delfi Day.

“If we don’t see a quick recovery or a second wave, prices will start to suck more and more and it will be a challenge,” warns Ž. Mauricas

G. Ilekytė says that the change in wages in the private sector will probably be very small this year.

“Some sectors have been closed, it would be difficult to expect wages to rise as fast as in the past. We are likely to see lower wage growth than last year, when it was around 9-10%. In the private sector , the change is likely to be very minimal, ”predicts the economist.

Ž. According to Maurico, the main concern is the fate of the middle class, if their purchasing power will drop sharply: “

“It could become even more dissatisfied and even a wave of emigration if society sees its purchasing power decrease. Because most of the support went to people with lower incomes, even pensioners will receive lump sums, to although they have suffered less from the crisis because pensions have increased and their incomes have not decreased, “says the economist at Delfi Day.