Lithuanian Economic Review: June 2017

Transcription

1 Lithuanian Economic Review: June 017 Gediminas Šimkus, Director of the Economics and Financial Stability Service at the Bank of Lithuania 19 June 017

2 The situation in the world economy has improved World import and Purchasing Managers Indices Per cent, annual change 5 Index World import of goods Purchasing Managers Index (PMI) (right scale) Sources: CPB, Markit and Bank of Lithuania calculations. 9 BANKAS

3 Higher economic growth is projected in Lithuania Real GDP forecast Per cent, annual change March 017 Bank of Lithuania forecast June 017 Bank of Lithuania forecast Actual data Sources: Statistics Lithuania and Bank of Lithuania calculations. BANKAS 3

4 Labor market tensions continue to substantially increase wages Distribution of wage growth Per cent, annual change IV quarter 017 I quarter Šaltinis: State Social Insurance Fund and Bank of Lithuania calculations. Wage percentiles BANKAS

5 Unused labor resources are running out Unemployment rate Per cent Unemployment rate Sources: Statistics Lithuania and Bank of Lithuania calculations. BANKAS 5

6 Unused labor resources are running out Unemployment rate and the number of unemployed per vacancy Per cent Unemployment level Units Number of unemployed per vacancy (right scale) Šaltiniai: Lietuvos statistikos departamentas ir Lietuvos banko skaičiavimai. BANKAS 6

7 Employee s share of income is increasing Unemployment level and share of labor income in GDP Per cent Unemployment level Share of labor income in GDP Sources: Statistics Lithuania and Bank of Lithuania calculations. Per cent BANKAS 7

8 The tension in the labor market will not flood back quickly Labor force Per cent, annual change P 018P 019P 00P 01P The level of activity is expected to increase to the same extent as in the past 5 years The level of activity growth rate is supposed to slow down by half The level of activity growth is expected to be constantly halved The most optimistic scenario More likely scenarios Sources: Eurostart, Statistics Lithuania and Bank of Lithuania calculations. BANKAS 8

9 The labor force will decrease, and the population of retirees will be roughly the same as now BANKAS Labor force and retirees Millions of persons Labour force Retirees Sources: Eurostat and Bank of Lithuania calculations. Till 060 Labor force 3 % Number of pensioners 0, % 9

10 The pressure on the pension system will increase Retirement age relative to labor force Number of retirees per 10 persons participating in the labour market 7 Number of pensioners per 10 people in the labor market No additional increase in the retirement age after 06 After 06 retirement age increases by months annualy until it reaches 70 years Sources: Eurostat and Bank of Lithuania calculations. BANKAS 10

11 Higher inflation will not reach the growth of wages ,5% Wages 5,7% Inflation 3,%,% BANKAS 11

12 Some of the prices of goods and services have gone up, but some have become lower Price change over three years ( / ) Transport -7. Housing, water, electricity, gas and other fuels -5.0 Communication -3.0 Clothing and footwear Food and non - alcoholic beverages Overall index Furnishings, hh equipment and routine house maint. Recreation and culture Health Education Restaurants and hotels Alcoholic beverages, tobacco Sources: Eurostart, Statistics Lithuania and Bank of Lithuania calculations. BANKAS Per cent, change over three years

13 Relatively similar price trends prevail in the Baltic countries Annual inflation in the Baltic States and the euro area Per cent, annual change M0 016M06 016M08 016M10 016M1 017M0 017M0 Eurozone Estonia Latvia Lithuania Sources: Eurostat and Bank of Lithuania calculations.. BANKAS 13

14 Lithuanian Economic Review Semi-annual publication of the Bank of Lithuania The Review examines recent dynamics of the real sector, prices, public finances and credit in Lithuania The Review assesses the outlook for economic development in Lithuania The annexes to the Review analyserelevant issues more comprehensively BANKAS 1

15 Thank you for your attention! Questions? BANKAS 15