bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Tuesday 24.10.2017 | Name days: Renāte, Modrīte, Mudrīte
LatviaLatvia

Expert: there is no doubt that wages and pensions should grow

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAnnual inflation rate about 3% will not remain for long. It is expected to decline closer to the end of the year, making general inflation rate around 2.5%. It is also expected that employment in the country will rise. Employers will have to put more efforts into finding employers and increase wages, Swedbank economist Linda Vildava shares her prediction for the near future.

After rapid growth in previous months prices in February had grown by only 0.4%. DNB Bank’s economist Peteris Strautins explained that it is standard practice for winter. «I would say inflation level was very typical for February. Last year, however, priced in February grew by only 0.1% after a 0.5% decline in January. The so-called base effect ensured that inflation level in January would grow to 3.3% after the 2.9% level recorded in August».

In regards to price changes, Swedbank economist Linda Vildava says: «Prices of goods increase at the expense of prices of raw materials – oil and food. Those prices were significantly lower in the first half of last year than they are now. Because no rapid rise of oil and food prices is expected, the effect of prices of raw materials will start to decline slowly as the year continues.»

DNB Bank’s expert notes that food and fuel price increases were expected. «They are directly linked to developments on the regional fresh milk market and world raw materials market. Consumer price rise in this category simply had to happen, because no one will compensate raw material price changes to buyers. Another interesting piece of news can be considered the communication services price rise of 6.3% over the course of the year, in clear association with the deepening of the European single market in this industry, which improves price convergence for operators in a good way.»

«Food was responsible for nearly half of contribution to annual inflation in February. Over the course of February, prices increased by 6.1%. This is why there are thoughts that certain types of income, such as pension level, should be more tightly tied to food products, not the entire consumer basket. It would be logical, but there are complications. Food prices do not just change upwards, they also change downwards,» DNB Bank economist comments on food products.

«Any politician that would allow automatic income correcting mechanism to work or oppose the initiative to not allow this mechanism to work would be declared a public enemy. There is no doubt that wages and pensions should grow,» Strautins says.

«The point of economic development is income rise, but it is not the main objective. This rise should be tied to a logical and politically predictable mechanism. We would definitely benefit from higher future wage growth influence on pensions than the one provided by the currently working mechanism. Pensioners have the moral right to enjoy rise of welfare the nation can achieve after they retire. To ensure changes can be performed, it is necessary to organize measures that would change the ration of working people and pensioners,» Strautins notes.

Swedbank economist mentions that it is possible to expect faster economic growth this year. «This is also because of influx of EU funds, more rapid employment rise and faster decline of unemployment when compared with last year. As a result, businessmen will have to put more effort into finding employees. They will likely have to increase wages. Because of that, the pressure of internal factors on prices may increase somewhat and be reflected in more rapid service price growth. Annual inflation rate above 3% will not remain for long. It is expected that it will decline by half by the end of the year, making the average inflation level around 2.5%.»

«Actual income in Latvia increase over longer periods of time regardless of price fluctuations. Thanks to that, food cost proportion in the consumer basket declines for all major social groups. The only reducer of long-term poverty risks is economic development, not careful manipulations with income of certain social groups,» notes DNB Bank economist.

Ref: 225.109.109.1478


Leave a reply

Pabriks: losing control over airBaltic would be a mistake for Latvia

«If attraction of an investor for Latvian’s national airline airBaltic results in full privatization of the company, Latvian state would make a strategic mistake,» says MEP Artis Pabriks.

Another person may be involved in NSL and ZZS illegal financing case

Corruption Prevention and Combating Bureau’s launched criminal process regarding possible illegal financing of parties To Latvia from the Heart and Union of Greens and Farmers has identified another involved person.

Mortality from strokes in Latvia may grow significantly in the near future

To raise awareness of the dramatic situation with strokes in Latvia and motivate decision-makers into improving stroke prevention measures and treatment and increasing funding for this area, cardiologists and neurologists invite officials to come to a discussion.

Pavļuts: party unions would be welcome, but not for politically technical reasons

In preparation for Saeima elections, unions should be considered by parties that have similar goals, not politically technical considerations, said Kustība Par leader Daniels Pavļuts in an interview to Rīta panorama programme.

Minister: changes in Russian schools needed for formation of unified political nation

Latvia requires a unified political nation, which is impossible to achieve living in different education spaces. With that, it is only natural for the process to progress towards our youth studying together, Latvian Education Minister Kārlis Šadurskis told Rīta panorama programme about the intended education reforms in Russian-speaking schools.

Czech election won by party of police-sought billionaire Babiš

In the parliamentary election of the Czech Republic, which took place over the weekend, centrist party ANO has won. It is chaired by billionaire Andrej Babiš, who has been stripped of the immunity of a member of parliament over suspected wrongdoing in attracting European Union farming subsidies.

Rīgas satiksme limits competition; agreements prevent ‘others’ from entering the market

Competition Council believes Rīgas satiksme’s contracts with private companies limit competition, because they prevent other players from entering the market, as reported by De Facto programme of LTV.

Weather will be clear and dry in Latvia at first; set to change in second half of the week

On Monday and Tuesday weather will be dictated by increased atmospheric pressure – weather will remain clear and dry. Wind will draw in from the east and south-east, which will be strong along the coast in Kurzeme, as reported by Environment, Geology and Meteorology Centre.

Spain denies effort to strip Catalonia of autonomy amount to coup

The Foreign Minister of Spain, Alfonso Dastis, has dismissed claims that the effort of the central government to introduce direct rule in the separatist region of Catalonia can be considered as a coup d'état as it is seen in Barcelona.

TM: the ministry is open for a full disposal of state-owned airBaltic shares

Latvian Transport Ministry is currently engaged in reviewing specific offers for attraction of investors for airBaltic. A full privatization of the company is not out of the question, says the ministry’s state secretary Kaspars Ozoliņš.

Week in Lithuania. Election watchdog’s decision puts budget grants for Liberals in question

A total of 45,336 euros in the costs of the training organised by an Institute of Applied Politics owned by Sarunas Gustainis, a former MP and former member of the Liberal Movement, for the party should be recognised as non-monetary contribution, says a task force established by the Lithuanian Central Electoral Commission.

BNN summary of the week: birth and death rates in Latvia turn out shocking. Gambling halls to close down

BNN offers a summary of this week’s topical news in a variety of categories: Fight; Truth; Business; Future.

Professor: by taking money away from science, the state shoots itself in the foot

The matter regarding insufficient funding for science has recently become more topical in the public space. President of Latvian Academy of Sciences Ojārs Spārītis is rather critical of the situation: Latvia has lied to the European Union and European Commission about making sure that funding for science reaches 1.5% of GDP by 2020.

To prevent fraud, audit of MPC recipients to be performed in Latvia

Latvian Economy Ministry intends to perform an audit of mandatory procurement component recipients and use new regulations to combat fraudulent activities, as confirmed by Economy Minister Arvils Ašeradens.

Rail Baltic procurements to be processed using Electronic Procurements System

Following the changes to Latvian Republic’s Public Procurements Law, all new procurements for Rail Baltica administered by RB RAIL will be processed using a free electronic information system and its e-contest subsystem.

Estonian construction price index pushed up by wages

The construction price index in Estonia has in July-September of 2017 increased by 0.9% in comparison to second quarter this year and by 1.7% from July-September of 2016, Estonian statisticians have estimated.

Surplus of Latvia’s government budget reached 9.5 million euros in 2016

In 2016 general government budget surplus accounted for EUR 9.5 million or 0.04 % of the Gross Domestic Product, whereas general government consolidated gross debt amounted to EUR 10 091.6 million or 40.6 % of the GDP.

Latvia to invest EUR 5.9 million into formation of unified port network

Ports of Riga planning region and Kurzeme planning region have commenced an important tourism project. The goal of this project is creating a unified yacht port network in Latvia and Estonia with quality services that would allow developing sailing tourism and attract foreign sailing enthusiasts in the future, reports the regions’ representative Inese Ozoliņa.

Graft-suspected Tartu deputy mayors resign

In Estonia's second largest city, Tartu, Deputy Mayors Artjom Suvorov and Valvo Semilarski have stepped down from office, Estonian press reported, after the politicians were arrested under suspicion of graft.

Expert: workers of Latvia’s NGO sector have high ‘burnout’ risk

Workers of Latvia’s NGO sector have a high burnout risk, said once the director of Providus Dace Akule in an interview to Latvijas Radio.

Producer: many young people come to work in the film industry

Latvia’s film industry has been steadily growing these past several years, and it is especially gratifying that many young people are coming to work in the industry, says director and producer, representative of Film Angels Productions Jānis Kalējs.

Pollution blamed for every sixth premature death globally

Nine million premature deaths globally in 2015 are said to be related to pollution, a study has found pointing to presence of harmful matter in air, water and workplace as the three main risk factors.

Infectologist: influenza kills biologically the weakest, including children and pregnant women

Influenza is an infection that affects both children and adults. However, it kills those who are biologically weak, says Immunization State Council chairperson and infectologist of Children’s Vaccination Centre Dace Zavadska.

Investor activity made easier between Latvia and Vietnam

An intergovernmental agreement has been signed between the Republic of Latvia and Socialist Republic of Vietnam on prevention of double taxation and tax avoidance in relation to income tax.

Colder masses of air to enter Latvia in coming days; precipitation to be limited

Although high atmospheric pressure will be present above Latvia in the coming days, southern regions in Latvia will experience short-term precipitation on Saturday, 12 October, caused by the cyclone active above Poland. Colder masses of air will enter Latvia in the coming days.