Economists: Lithuania may become an expensive country that will not catch up with the rich West
Swedbank’s chief economist Nerijus Mačiulis believes that due to insufficient investments of Lithuanian business into the country’s economy, the state may not be able to catch up with the rich Western countries.
“It simply came to our notice then. And then it will be very difficult to attract investment. Investors will simply say: there are no talents here, and those who are very expensive, picky, it is difficult to keep them, ”the analyst told the Seimas Committee on Budget and Finance on Wednesday.
According to him, companies are already complaining about it.
“Already in Poland, where labor costs are similar, employees stay in one job for two years, in Lithuania for half a year,” said Ž. Mauricas.
N. Mačiulis says that he does not see the negative consequences of the rapid growth of wages: “The share of Lithuanian exports in the world, as it would not be, continues to grow even with the rapid rise in labor costs.”
However, according to the economist, this could end very quickly.
“The ability of companies not to pass on most of their labor costs to end users and buyers in foreign markets is still very limited,” said MP Mačiu.
He also believes that Lithuanian business investment in the country’s economy is insufficient, so there is a lot to talk about convergence and the effort that a rich Western country has.
“One of the worst and saddest indicators of Lithuania’s economic evolution over the past decade is that business investment accounts for a very low share of GDP,” said the economist.
“Lower not only than in the neighboring Baltic countries, but also less than in Sweden and the euro area average. It’s talking about convergence and richer countries in the West is very difficult without investing. We chase in terms of salary, in terms of prices, but in terms of investment. And here is the biggest tragedy, “said N. Mačiulis.
According to him, small and medium-sized businesses say they cannot invest because they do not have the money, there is no shortage of funds for big business, but investment is hampered by labor shortages, a shrinking market and strict immigration quotas.
N. Mačiulis points out that in the last decade Lithuanian business has been developing much more actively in the neighboring markets, not within the country.
Ž. Mauritius, among other things, predicts that the country’s migration balance will be negative last year, although wages are rising. According to him, the emigration of people may have been caused by higher prices and higher real estate prices.
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