Flash comment: Latvia - May 18, 2016
The unemployment rate up to 10.3% in 1Q 2016

  • The unemployment rate up to 10.3% in 1Q 2016 (10.2% a year ago)
  • Employment up by 0.6% annually
  • The unemployment rate to decline to 9.2% this year on average

With slower economic growth in Latvia a heatup of the labour market is delayed as well. Latvian labour market is largely stagnating – the unemployment rate is not falling anymore and there is hardly any employment growth. Annual employment growth was 0.6% in the first quarter. Meanwhile, the unemployment rate increased to 10.3% in the first quarter from 9.8% a quarter ago (10.2% a year ago). Participation rate was largely flat at 68%, still substantially higher than a year ago mostly owing to smaller number of pupils/students and pensioners. 

Employment dynamics across industries is very uneven and volatile. Given that these data come from surveys, figures are particularly subject to error in smaller industries. Among the largest sectors employment growth is observed in manufacturing, while a fall in construction. In domestic trade and transport changes are close to zero.

Outlook

The unemployment rate is expected to fall this year to 9.2% on average; however, mostly owing to diminishing labour supply (ageing and decreasing population). Employment is forecast to be largely flat this year. Companies are cautious in hiring, instead trying to invest in machinery and equipment and to increase wages for existing employees. Most of the employers are not increasing their production capacity, thus demand for labour is not growing.


 

For more information please contact Ms. Lija Strašuna, +371 67445875, lija.strasuna@swedbank.lv

 ________________________________________ 

This email is sent through the web-based distribution system of Swedbank Macro Research. As a subscriber you can change your settings regarding what publications you will receive by clicking “Change your settings”. You can also unsubscribe by clicking "Unsubscribe"

Subscribe!
This letter is distributed by Swedbank in cooperation with Brightly. The letter is personal.