Bank of Latvia: Unemployment Drop to Halve This Year
By admin at 18 January, 2012, 10:52 am
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Registered unemployment rate has stabilized since mid-October, and at the end of 2011 was 11.5% of economically active population, reported Bank of Latvia economist Oļegs Krasnopjorovs.
Writing for the website Macroeconomics.lv, Krasnopjorovs observed, “It is expected that during the remaining winter months the level of registered unemployment could rise slightly – 0.1–0.2 percentage points a month – yet as seasonal vacancies would appear in spring (particularly in construction, agriculture and restaurants), unemployment drop would resume. In 2012 overall, with a slower development of the economy, the drop in registered unemployment will also be about half of what it was in 2011 when it amounted to 2.8 percentage points. In the second half of the year, the level of registered unemployment may approach 10%, but the annual average is likely to exceed the Ministry of Welfare forecast (10.1%).”
In his commentary piece for the website, the Bank of Latvia economist noted that given the uncertain external environment, business confidence regarding the further employment dynamics remains cautious. However, he wrote, the rise in employment in 2011 almost matched the rate in 2007 despite unpronounced (around zero –as presently) business tendency. “This points to the risk that the business tendency data assess the subjective mood of the entrepreneurs, reflecting the view of today and yesterday but may not help to make credible predictions about tomorrow,” Krasnopjorovs reported.
The Bank of Latvia economist also noted that at the end of 2011, 2.5 thousand vacancies were registered with the State Employment Agency (SEA). However, he wrote, the whole number of vacancies in the economy is much greater, since only those vacancies that the entrepreneurs hope to fill with the unemployed (and these tend not to be top positions) are registered with SEA.
Krasnopjorovs also reported that the firm’s survey data by the Central Statistical Bureau (CSB) likewise do not include all vacancies. For instance, he noted, at the end of the third quarter only 1.3 thousand vacancies were listed for the private sector, thus not including even the majority of vacancies registered with the SEA. The Bank of Latvia economist concluded: “All of this should be borne in mind when one reads in the media that ‘X unemployed are competing for one vacancy.’ Determining vacancies in statistics is even more complicated than including all the
unemployed: the number of the unemployed per vacancy tends to be much lower than possible to calculate from any official data.”
Link to full text: http://www.macroeconomics.lv/unemployment-drop-halve-year.
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