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Monday 19.02.2018 | Name days: Zane, Zuzanna
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Economists: salaries will grow for even more workers this year

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The average consumption price increase will reach 1.9% this year. External and domestic pressure on rices will remain weak. Next year’s price increase will become more rapid, reaching 3.5% on average – it will be due to an increase of domestic pressure, moderate increase on global raw material prices, as well as single time Euro adoption expenses, predict Swedbank economists.

The increase of consumption prices will be lower than the average salary increase. This will improve the overall purchasing power. It is unlikely that the mood of consumers should worsen significantly.

At the same time, bank experts note that slower economic growth means slower improvement on the job market. The current increase is mainly noted in industries aimed at the domestic market, while export industries have become careful.

The creation of new jobs will become slower this year. In 2014, however, Latvian exporters will be able to attract new employees more actively. It is expected that the average net salaries will grow by 4.7% in 2013 and by 6.5% in 2014.

“Both employment and salary increase will remain unequal among industries and levels of qualification. Not all employed people will feel improvements on the market. It is expected, however, that a moderate salary increase will be applied to a larger number of people. The will of enterprises not to allow an increase of expenses and a slow increase of prices will reduce the opportunities of the employed to ask for a raise,” – predict the economists.

“Last year, the government managed to complete several important economic tasks. This includes the reduction of the workforce tax, concentration of funding for professional education around strong centres. However, budget reforms for 2013 are rather modest: their effect is expected to be small. Even though discussions will go on about a number of structural reforms, this includes higher education, welfare and healthcare, the rate of reforms has dropped and their realization is currently on hold. Sometimes it seems that reforms are initiatives of specific ministers and the overall support of the Cabinet of Ministers is either non existent or is only partial. Reforms need to be finished before they are adopted. However, constant delays mean putting off any benefits from the reforms on an indefinite period of time,” – says Martins Kazaks.

It should be added that the Economic Survey Branch of Swedbank has increased Latvia’s GDP growth outlook for 2012 to 5.4% (previous – 4%). However, this year’s growth rates are becoming slower – GDP is expected to grow by 4.1%, as if reflecting the global uncertainty and steep competition on export markets. Economic growth will once again become stronger in the second half of the year and will reach 5% in 2014. This will be mostly due to a stronger external demand, further workforce reduction and better household and business mood.

Ref: 102.109.109.5706


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  1. JPR says:

    Not right. Latvia has hard times ahead.

    Thumb up 0 Thumb down 0

  2. Hectors says:

    Economists are chalatans and fortune tellers . They are allways . A dowturn is quite possible in 2013.

    Thumb up 0 Thumb down 0

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