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The Ministry of Finance offers another dose of optimism about the recovery. In a presentation Tuesday, the scenario says a gradual economic recovery is expected as early as the second half of this year.
Economic outlook
The script presentation takes place on Tuesday morning. During the broadcast, the Minister of Finance, Vilius Šapoka, also spoke with the President of the European Investment Bank Werner Hoyer about the latest macroeconomic changes in Lithuania and Europe.
“The latest statistics suggest that the end of Lithuania’s economic recession due to the COVID-19 pandemic was reached in April and in the second half of this year, after economic restrictions in our country and the European Union (EU) , which is the main partner for foreign trade, recovery of the country’s economy, “says the economic development scenario prepared by the Ministry for 2020-2023.
Wages will rise more in the public sector
The Ministry of Finance predicts that wages will grow more in the public sector this year.
Wages will decrease
In the private sector, wage growth will slow for some companies due to declining supply and demand, announced downtime, and lower demand for labor.
It is true that the support to companies and the increase in the monthly minimum wage since the beginning of this year, according to the ministry, will make up for the losses.
This year, the country’s average monthly gross salary is expected to grow 1.8 percent, and in 2021 the growth rate will reach 3.3 percent. In the following years, the growth rate will approach 5%.
Limited price growth is also forecast, with a decline in oil inflation to keep rates low.
The effects of Brexit can be shocking
The Ministry of Finance still sees the prospects for economic recovery as fragile. “At the time of this writing, the development of the COVID-19 virus in the world was not under control, so there is a risk that countries around the world will have to take measures that have a negative impact on the economy again to control your outbreaks, “said the stage.
Furthermore, the risk of “hard” Brexit has not disappeared. “There is a risk of changing international trade conditions. If these risks materialize, GDP could fall 16.8 percent this year, and Lithuania’s economic recovery would take longer than anticipated in the baseline scenario,” said the ministry.
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