Mačiulis and Mauricas disagree on whether prices will rise: they named different factors

Speaking at the EBIT Management Conference about the current economic situation, Ž. Maurice explained that the economy is unlikely to return and will never go back to what it was before, which he said will be affected by technological change.

According to him, it is important that while the overall picture of the recovery is good today, different sectors are currently in different situations. Here tourism and aviation, as they said, are going through difficult times to this day that are unlikely to end so quickly.

“It is a difficult dilemma for them: what to do in the future. Other sectors, as they advanced, did.” I think the changes will be more pronounced and in a few years we will have a completely different economic structure than we have now, ” said.

He asked what Ž. Maurice thinks about the rise in inflation, the economist has assured that in his opinion it will not grow and the rise in prices will be slowed by the technological changes already mentioned.

“Similarly, I could probably compare myself to the industrial revolution. What happened in industry in the 19th and 20th centuries is now happening to the service sector.

We had deflation during the Industrial Revolution because before the Indians sewed textiles and then everything moved to Britain because it became automated and cheap.

There was a crisis in India and the British survived the economy, but prices fell. Now it’s the same as we have in the industry, we have in the services field, because the services are provided remotely, with a few clicks of a button, a lot is automated, which will put a lot of pressure on the prices of the services . And where will that money go then?

In the stock markets, but I think real estate (RE) will also jump on the track. Look at what’s happening in Germany with house prices, in Sweden, because inflation in general will not be, well, at least as high as expected.

It seems to me that technology will not allow prices to accelerate, ”he said, setting an example.

“Let’s say we take electric cars. It is reported that in 2022 or 2023-2024, the prices of electric cars will stabilize and will be lower than those of diesel or gasoline machines. So where is that inflation? They will not be. “, Ž explained. Mauricas.

And here the economist N. Mačiulis said that he did not believe in miracles and added that his opinion was a little different. As argued, technological progress will not be enough to stop price rises for several reasons.

“We just realized that globalization was beginning.

There was no net inflation in developed countries for a quarter of a century. Average inflation was below 2 percent. due to deglobalization.

Production has risen where it is cheap and efficient: China, Southeast Asia, other countries. Now there is another process underway: the production supply chain needs to be shortened. Everyone wants to reduce their dependence on China, Donald Trump has already started fighting China and imposing import tariffs before the pandemic. It won’t turn them into anything but inflation. There are many factors that have raised prices. I’m not even saying that with the rise of state capitalism and the feeling of power, the desire to help everyone, the increase in the monthly minimum wage will increase a lot in many parts of the world, ”said N. Mačiulis.

The Deputy Minister of Economy and Innovation, Ekaterina Rojaka, said she was waiting for the rise in inflation, because it would show that the crisis in our country is over.

“It just came to our knowledge then <...> Inflation is proof that the economy is holding up and not stumbling. And not only the Lithuanian economy, but the European space. “The best proof that we have come out of the crisis, and there is inflation,” he said.

Mačiulis added that inflation in Lithuania is increasing for 4 months. In a row and later in the debate he advised to keep an eye on gold prices, which really tells you what the risk of inflation is today.