SEB Bank heck the forecast of economic recession

Added transparency of SEB bank

In early May, when Lithuania’s GDP is forecast to decline by 8.7% this year, and the recovery will reach 6.1% next year.

Tadas Povilauskas, economist at SEB Bank, says the forecast is being revised taking into account the latest data on industry, retail and domestic consumption. They testify that the country’s society and companies were more successful than expected in the first year of COVID-19, explains T. Povilauskas, presenting the Lithuanian macroeconomic review for the second quarter of the year.

embedgallery :: https: //foto.vz.lt/embed/487? Placement =

The conditions for companies to climb into the well in the second half of the year are favorable if the second pandemic outbreak in Lithuania is avoided. However, we understand that until the virus is fully controlled in Lithuania and in the world, the economy will not operate at full capacity and the annual decline will continue in all the remaining quarters of the year, the economist emphasized.

Due to the relatively good management of the epidemiological crisis, the reduction of tourism, the impact of the automobile sector and other factors, the country’s economy will decrease less than in the euro area. The latter, according to SEB Group forecasts, will decrease 9% and grow 6.7% next year.

Domestic consumption is recovering

The recovery in domestic consumption helps Lithuania to climb into the wells, which will attract much less in April and May than was feared at the beginning of the quarantine. Retail trade turnover in May at constant prices was only 0.6% lower than a year ago, and excluding fuel sales, retail business grew 1.8%.

Consumer expectations and confidence indicator gro 2017 According to SEB Bank, the greatest concern is the changes in consumption in the quarter. This is the busiest quarter for traders, and mons, especially in the event of an unfavorable epidemiological situation, can again limit emissions very quickly.

Registered unemployment in Lithuania has increased 2.7 percent since the end of February. point. SEB Bank forecasts that the average unemployment rate will peak at the end of the year and the average unemployment rate will be 9.3%. Next year it amounts to 8.4%.

SEB Bank forecasts that in 2020. The average salary before taxes will be 2.5% higher than a year ago, and in 2021. it will grow by 3.5%.

The coronavirus outbreak has had the biggest impact on the price of energy, which has increased by almost a fifth during the year. Excluding the path of depreciation, annual inflation remained in the traditional range of 2.5-3%. SEB Bank does not change the previous forecast that average annual inflation will reach 0.8% in 2021. 2.2%

Industry forecasts will be a sensitive topic

Although the industry fell 5.1% and manufacturing 5.5% in the first five months, the recovery is also visible in this area.

As Lithuania’s largest export partner recovers, a smaller decline in the industry is expected in the coming months. However, the sector is also the most sensitive, so we remain cautious when forecasting changes in industrial production in the coming months, according to the survey.

The portfolio of sudden loans to non-financial corporations at the end of May was 480 million. EUR lower than at the end of February, but at the same time the company’s deposits increased by 530 million. EUR.

I think the business is exchanging working capital, but at the same time it is not bad for the main activity. The government’s stimulus measures also helped the government borrow more than € 500 million by paying the government on time without saving money. Population deposits also grew rapidly. All this, if the coronavirus problems are successfully addressed, can have a positive impact on consumption and investment next year, says T. Povilauskas.

Rayti commented