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Emigration and economic growth will continue heating up labor market in Latvia

BC, Riga, 23.05.2018.Print version
As the population of Latvia continues to decrease while economic development is accelerating, the demand for labor will continue to rise, Swedbank senior economist Agnese Buceniece told LETA.

Very rapid economic development at the beginning of 2018 had an effect on the labor market also. The number of unemployed residents decreased by 11,300 or 12.4% in the first quarter year on year, while the unemployment rate decreased from 9.4% to 8.2%.


"If compared to the end of 2017, a slight increase would be as per usual due to the seasonal reduction in vacancies during the coldest months of the year. The decreasing unemployment in the first half of 2017 was largely due to the reducing population, the drop in unemployment at the start of this year was thanks to increasing employment rate. The number of employed persons increased by 15,500 or 1.8% as compared to the beginning of 2017," explained the economist.


Residents in the 55-64 age group were the main contributors to the increasing employment, but employment across other age groups, except young people, also increased. Buceniece expects that the number of employers complaining about labor shortages as the main factor hampering business activity will continue to increase, and filling vacancies will be increasingly hard.


"In order to find employees, and keep them, employers will have to pay more. And as job seekers' opportunities to find a job and wages increase, residents' financial situation will improve," added Buceniece.


As reported, 80,000 people in Latvia were unemployed in the first quarter of 2018, which is 8.2% of economically active population, according to the results of the Labor Force Survey conducted by the Central Statistical Bureau.


Compared to first quarter of 2017, the number of unemployed persons has dropped by 1.2%age points or 11,300 people, but rose 0.1%age points or by 300 people from the previous quarter.






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