Life in 2021: for some, a financial situation is expected to deteriorate further

What year 2020 was for Lithuania and Lithuanians and what awaits them was discussed on the “Delfi Tema” program.

At the end of the year – economic growth

Commenting on last year, SEB Bank economist Tadas Povilauskas said that 2020 was a difficult year overall, as it changed economic trends and people’s personal lives, it brought a health crisis, but as far as the economy, the year was not bad.

“The economic recession was not as terrible as we thought in March of last year.

The overall result was not bad, because after summarizing the national accounts of all countries last year, we will see that the Lithuanian economy probably performed better in Europe.

With regard to people’s income, there has been inertia, and those who have a job have seen an increase in their income, an increase in pensions, an increase in their savings ”, explained the economist, highlighting that the last year, which I would not like to repeat together.

“Today 80 thousand employees are in downtime and in 2021 we enter with a flaccid leg,” he said.

Responding to the fact that the minimum wage, pensions and children’s money have been increasing since the new year, the economist assured that this year should be better for Lithuania, but said that they should be divided into several parts.

According to him, the situation will remain difficult in the first quarter and in the second and third quarters. Demand for those goods that Lithuanians did not buy due to store closures should recover.

“I really want the last quarter of this year to be normal, we don’t have to go back to restrictions.

This year, we can speak of an economic growth of around 2%. and greater growth in 2022 ”, predicted T. Povilauskas.

“As far as people are concerned, this year the situation will be the same as last year.

Those people who work in less affected sectors and have stable incomes are contract workers, they are likely to accumulate savings again, the income exceeds the costs and that money will be spent in later months. And the workers who work in the affected sectors will not be able to save much and their financial situation should deteriorate ”, predicted the economist.

However, according to him, it should not be forgotten that pensions will increase by 10% this year, children’s money will increase and companies, at least at the beginning of the year, will receive financial support.

“The situation is not very good, but on the other hand, we cannot say that everything is bad.

With such a cautious optimistic mood, we need to stretch those 1-3 months and I think we will have a lot of growth, “said the economist.

Challenges await business

Speaking about the past 2020, Marius Dubnikov, financial analyst and vice president of the Lithuanian Business Confederation, said that neither companies nor society were prepared for that year.

“January 2020 was a very optimistic start to the year, when a good year was forecast, both economic growth and development, investment, etc., and the letters were already mixed in mid-March.

It is not possible to prepare for this, especially in certain sectors. The first wave hit everyone from the unknown. <...>, and over the summer, the company prepared and recalculated its ability to continue as a going concern.

In this case, it really all depends on the sector you are in. Again, these are sectors that have doubled many times, such as hotels, restaurants, catering, tourism, and these sectors have undoubtedly experienced a second wave that is immeasurable and probably only a few companies will be able to survive, ”Dubnikov warned. and those who were well prepared for the second wave.

“They have optimized themselves a bit, they have learned to work remotely, they have reviewed the options and depending on the sector, IT, industry, biomedicine, they are doing very well today,” he said.

It is true that today’s businesses, according to Dubnikov, face another problem, the coronavirus is spreading in companies and infecting other employees.

“Companies face the problem of the desertion of people from the labor market. Having orders sometimes makes their implementation difficult,” he said.

According to him, if the quarantine were to extend further this year into the spring, the business would face even greater challenges.

“For companies with many problems that are completely eliminated from doing business to this day, if they did not go bankrupt at the end of this quarantine, that death sentence will come sooner or later. And here a wide range of businesses will touch: restaurants, hotels, tourism companies, we will see many problems.

“If the harsh quarantine continues for a long time, it will be more difficult for those companies that are still successful today because people will just get sick, they will not be able to come to work and therefore our economy will slow down,” he said.

We will return to the offices in the fall.

Mindaugas Statulevičius, president of the Lithuanian Real Estate Development Association (LNTPA), also discussed the situation of the real estate market (RE) and what to expect this year.

Speaking about the housing market, he said that it had been falling into the abyss since early March and was only dug in the summer.

“The main reasons (for being able to dig) were that most potential buyers felt safe buying a home, they weren’t afraid of losing their job. People felt pretty solid. And in the summer, the Lithuanian economy itself showed its strength and resistance to the first wave, ”he said.

During last year’s pandemic, according to M. Statulevičius, residents were actively interested in the second housing segment both in Lithuanian resorts and in smaller cities and districts.

“This market has flourished in other colors and those who developed that property probably had a good year. It is likely that this year will be quite similar, because people will not be able to travel much, they will feel insecure or they will not yet be vaccinated, and internal trips will have a very positive effect on the real estate market, ”he predicted.

Asked about the offices and their demand, the president of the association did not deny that the concept of the workplace has changed dramatically in 2020, but said that he was more optimistic and reluctant to say that the offices would no longer be necessary and the changes in the workplace would be irreversible.

“Now there is a lot of discussion in the world about how offices will change, maybe fully open spaces are unnecessary, we will all work part-time from home in shifts, we will only meet at the workplace for a day or two, time will will tell.

We are now designing offices that the best architects and investors in the world expect, and they are not much different from the ones we are used to that we have been working in lately.

It is likely that there are no tectonic fractures at this site and people will as the epidemiological situation changes. I think that in a year and a half we will be able to talk about the real change of offices, ”he said.

According to M. Statulevičius, residents could start returning to the offices in the fall of this year.

“Over the fall, when much of the country will be able to get vaccinated against COVID-19, there will be no reason not to go back to work.

Of course, how each company will organize its work culture, how much it will be able to allow to work remotely, how much people will want, time will tell. In autumn, we will see the real situation and those who can, I think, for the most part, will definitely return to their normal work environment, “said the real estate expert.

He explained that in 2020-2021. Some 15 new offices are projected in the capital’s office market.

“Some of them have been opened, the other part is still under construction or the installation is being completed, so I think we will have that number.

That unemployment rate, a figure that investors pay close attention to when making decisions to develop business assets or abstain, is very low, around 5-7 percent. There are plans for companies to move from one office to another, we see the planned development of companies from abroad and their arrival in Lithuania, ”he said.