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April is very ungrateful for Lithuania’s economic performance, but in May, despite significant uncertainties and future risks, there are signs of economic recovery, says Finance Minister Vilius Šapoka.
“Due to the pandemic, retail sales fell 17.5 percent in April, catering companies’ turnover fell almost half in March this year and in April by almost 70 percent.
Although industrial activity in Lithuania was not restricted by economic closure measures, in March-April this economic activity also felt the secondary effects of the quarantine in Lithuania and the contraction of external demand caused by the pandemic, “said V. Šapoka.
The decline in retail sales, according to the Ministry of Finance, is the largest monthly decline in retail sales since 2009.
According to the Minister of Finance, positive signs are observed in the labor market.
“Since the end of April, there has been a slowdown in the growth rate of the registered unemployment rate. During the past four weeks, 12.3 thousand. Vacancies – 60 percent. More than the previous four weeks. The number of job offers it is also increasing, “said the minister.
After easing quarantine conditions in Lithuania, according to the Minister, the negative impact of the pandemic on the economy will be felt more through the contraction and uncertainty of foreign demand.
“However, I am confident in the flexibility and creativity of Lithuanian businesses, I think we will reorient ourselves and discover new opportunities really quickly, we have demonstrated this many times in the past,” said V. Šapoka.
According to preliminary data from the Ministry of Finance, in May, the state budget received about 29.6 percent of revenue. (257.3 million euros) less than expected and around 19.9%. (151.9 million euros) less than in May last year. For comparison, 32.1 percent was received in April. less than expected and 29.4 percent. less than a year ago
In January – May this year, state budget revenue was approximately 15.2%. (563.2 million euros) less than expected and around 8.1%. (277.5 million euros) less than in the same period last year.
The mood in the service sector is bleak
According to a survey by the Ministry of Finance, the expectations of companies and consumers are improving. The general confidence of economic participants (producers, consumers and investors) in the Lithuanian economy improved in May compared to April. The indicator of economic evaluations was 2 p.p. higher, but sentiment in the service sector remains grim.
The industrial confidence indicator increased by 7 p.p. (decreased 15 percentage points during the year), producers were more optimistic about production growth and export prospects. The expectations of the construction and retail companies improved by 1 and 4 p.p., respectively.
While the consumer expectations index was still worse than a year ago, it was 5 p.p. Better than in April, the population was more optimistic about the prospects for their financial situation: they intended to spend more on larger purchases, more favorably on the country’s economic outlook.
However, sentiment in the services sector continued to deteriorate after a sharp decline in April (46 basis points during the month). The service confidence indicator decreased 5 pp in May compared to April. (66 p.p. per year, the same as in April). However, companies in this sector also began to be more optimistic about the prospects for demand for services provided (58% of companies forecast a decrease in demand in April and 47% in May).
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