Mauritius: economic overheating could happen faster than we forecast

“In April of last year, migration opportunities were very limited: there was a heat of the pandemic, restrictions prevailed between countries and within them. There was no point going somewhere, because all the work and studies were done remotely, ”said Eltai Mauricio, comparing these and 2020. migration data.

According to the economist, currently one of the main reasons for emigration is the continuous closure of certain sectors of the economy.

“The first and probably the main reason for the emigration is that, although the economic situation in Lithuania looks good, only about two-thirds of the economy is operating at full capacity, the remaining third is not. And the last part is still operating at a very good rate. low capacity. Consequently, the people who work there no longer want to wait for the situation to improve, they are looking for other opportunities and one of the alternatives is to seek opportunities abroad, “he said.

Furthermore, the EU’s economic recovery measures have led to a significant reduction in labor supply as a result of increased demand for workers, Ms Mauricas said.

“Western European labor markets have depended on immigrants from third countries for many years. The pandemic stopped these migratory flows: last year, migration to the EU was at an all-time low for the last 30-40 years. (. ..) As countries spent a lot of money to stimulate the economy, there was a great demand for workers, but the supply fell drastically. As it is very difficult to attract workers from third countries, our eyes have turned to the periphery of the EU, including Lithuania, ”he said.

According to the economist, due to the shortage of workers in Lithuania, the country may experience economic overheating.

“The biggest risk is that we enter a spiral of rising inflation and rising wage costs. There would be an overheating of the economy of this kind, and it could happen faster than we predict. It could be already this year, especially when they will open more activities. (…)
By July, a good number of people will probably have been vaccinated, then the company will try to compensate, hire employees and see that there are not as many. It will be a great challenge. Lithuania will have to make sure that young people do not emigrate, that they then do not have to look for workers elsewhere or try to bring them from third countries, ”he told Eltai.

“I think the worker shortage may be one of the main factors hampering future economic growth or recovery,” Ž. Mauricas.

At that time, D. Burneika pointed out that the growth of the economy and the monthly minimum wage (MMA) do not always illustrate the financial well-being of the country’s population.

“With the lifting of restrictions in April, especially as the situation in Britain improved, some people were able to leave or declare their departure.

While the economy is growing in formal terms, as are wages, at least the growth of the latter is somewhat artificial, as those in the specialties receiving the lowest wages were simply unable to work during the pandemic. “… Therefore, that prosperity is not necessarily as great as it seems,” he said.

However, the demographer noted that increased emigration would not be considered a long-term trend.

“I don’t think this is a long-term trend. This is most likely the current temporary unemployment situation in Lithuania and other countries affected by COVID-19,” he said.

At that time, it is estimated at 9.3 percent. increase in mortality in the country in April and 7%. reduction of the birth rate, D. Burneika pointed out that both indicators will also return to normal once the pandemic subsides.

“Everything will return to normal with mortality, it will begin to decrease. At that time, the birth rate drops substantially during all crises. In fact, there is no reason for the birth rate in Lithuania to drastically increase or decrease in the long term, ”he said.