Flash comment: Latvia - February 23, 2016
The unemployment rate gradually decreasing
  • The unemployment rate down to 9.8% in 4Q 2015, compared to 10.2% a year ago
  • Employment up by 1.3% last year, partly supported by an increase in the number of economically active individuals
  • The unemployment rate expected to continue to gradually decrease, reaching a tad above 9% this year on average.

Labour market gradually warmed up last year. The unemployment rate in the fourth quarter reached 9.8%, which is 0.4 percentage points less than a year ago. Employment grew by 1.3%, with the growth rate accelerating in the second half of the year (reaching 2% in the fourth quarter). The number of employed rose not only due to decreasing number of job-seekers, but also due to previously inactive individuals joining labour force. Namely, despite still decreasing working age population, number of economically active individuals started to grow in the second half of last year, after a two and half year long decline. The employment rate stood at 61.4% while participation rate was at 68.1% in the fourth quarter. 


Employment dynamics last year differed across industries. From the largest industries, employment declined in manufacturing (though a very positive surprise was employment growth in the fourth quarter – by 9% or by 10 thousand employees compared to a year ago), and domestic trade while inched up in transport and commercial services.

                                                                                                                                        Source: CSBL

Outlook

The labour market will continue to gradually warm up this year, and the unemployment rate is expected to gradually decline further, reaching a level tad above 9% this year. It is seen already that the unemployment rates for higher skilled workers has reached the pre-crisis level. It is still slightly higher for lower skilled employees, but will continue to gradually decrease along with the economic growth. It becoming more difficult to find qualified labour force – and it seems that the growth recovery in the number of economically active individuals indicate this. The demand for labour force is strong – and so far inactive individuals are being involved in the labour market.



For more information please contact Mr. Andrejs Semjonovs, +371 67445844, andrejs.semjonovs@swedbank.lv
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