Banks, Direct Speech, Financial Services, Labour-market, Latvia
International Internet Magazine. Baltic States news & analytics
Wednesday, 08.05.2024, 01:12
Latvia: The negative impact of COVID-19 can already be seen in the labour market
According to the data compiled by the Central Statistical Bureau, the unemployment rate increased to 7.4% in the first quarter of 2020. With employment contracting, the unemployment rate grew by 1.4 percentage points q-o-q. Moreover, considering that the state of emergency was declared in Latvia only in mid-March and it was later extended, unemployment is likely to grow further in the second quarter of the year.
Bans on gatherings and travel restrictions imposed due to the state of emergency have nearly paralysed activity in sectors such as accommodation and catering, event organisation and passenger transportation. The pandemic has also affected other sectors that have to deal with supply chain interruptions and face logistics issues and downtime. Thus, the contraction in employment is a logical consequence.
Previously, lower employment levels were largely attributed to a decrease in the economically active population, but current developments are associated with a decline in business activity. It should be noted that the restrictions have had a particularly strong impact on the sectors employing large numbers of people. Therefore, supporting employment is even more important. So far, downtime benefits have partly prevented a steeper employment decline. However, if the benefit payments cease before the economic activity has resumed, the unemployment rate is likely to rise.
According to the latest economic sentiment data compiled by the European Commission, the share of businesses referring to labour shortages as a factor limiting business activity has decreased and the employment expectations indicator has also deteriorated sharply.
Therefore, employment is unlikely to grow in the coming months. With their financial resources shrinking, businesses are trying to prevent wage cuts by employing alternative strategies, e.g. by reducing the hours worked or the number of people employed.
Future development will depend on successful containment of the virus, which would allow further lifting of restrictions and boost economic recovery, as well as on the improvement of employee productivity.
Considering that many jobseekers were recently employed and have the required skills, employment is likely to expand once economic activity resumes. However, for the employees receiving downtime benefits to return to work, businesses need some assurance that their operation will normalise in the medium term; otherwise, the unemployment rate is likely to continue rising. Therefore, it is important to consider further measures to reduce unemployment.
- 28.01.2022 BONO aims at a billion!
- 25.01.2021 Как банкиры 90-х делили «золотую милю» в Юрмале
- 30.12.2020 Накануне 25-летия Балтийский курс/The Baltic Course уходит с рынка деловых СМИ
- 30.12.2020 On the verge of its 25th anniversary, The Baltic Course leaves business media market
- 30.12.2020 Business Education Plus предлагает анонсы бизнес-обучений в январе-феврале 2021 года
- 30.12.2020 Hotels showing strong interest in providing self-isolation service
- 29.12.2020 В Латвии вводят комендантский час, ЧС продлена до 7 февраля
- 29.12.2020 В Rietumu и в этот раз создали особые праздничные открытки и календари 2021
- 29.12.2020 Latvia to impose curfew, state of emergency to be extended until February 7
- 29.12.2020 18-19 января Наталия Сафонова проводит семинар "Управленческий учет во власти собственника"