I watch with horror what is happening in Poland and I pray that Lithuania will not go so far
Responsive speeds
“A few months ago, it was very clear that most of the inflation was related to energy resources: heating, electricity, gas. As early as December, compared to the same month a year ago, the prices of many goods and services are a tenth of food: and leisure services, education and health. Inflation has become much wider, ”N. Mačiulis reviewed the economic situation.
According to the economist, a lot of work that this is only a problem of increased energy resources, but it is already visible that companies have large raw materials, more expensive raw materials and transport.
“Inflation has not been high for the last five years, reaching 3%. Companies have yet to manage to pass on the final costs to the consumer. When now simultaneously in 2021. everything fell into one place, we saw that even telecommunications could not find a way out – the companies also raised fixed prices for a long time, ”the economist said.
However, it is acknowledged that a similar situation exists across the European Union (EU): or 10% each. “
According to N.Mačiulis, there were objective reasons for such a rise in prices – some companies paid 10 times more for electricity in December than usual.
The economist also emphasized that prices rise when they can rise: lately, Lithuanians have been complaining not about prices, but with a long wait: they have to wait for almost 9 months for a new car and 2 weeks for a massage. “I don’t remember such an environment in my professional environment when there was such a shortage,” said N.Mačiulis.
“Some are going through a period of prosperity, but inflation has the feature of extinguishing itself: when prices rise so much that they become unaffordable for the most part, there is no room for price growth. We don’t see it yet – everything proves that we all drink chocolate, “said Swedbank’s chief economist.
Nevertheless, A.Vizickas has a vision of different situations: “Lithuania is not a homogeneous object, Lithuania with at least two speeds: those who have a good pajamas and those who barely have enough to survive. This Lithuania is big enough, if we leave the big city and end up in a small town, then Lithuania lived at that second rate from salary to salary. ”
The number of people in “Second Speed Lithuania” is considerable: “If there are about 2.8 million in total, then 1.2 million. are assigned to those receiving employment from pajamas, of which 160 thousand. receives a minimum or less. 1.6 million are maintained: students, children, pensioners, the disabled. There are also impressive numbers of unemployed people. ”
However, according to N.Mačiulis, this is a simplified approach. According to him, there are at least “two million Lithuanians” – each household is unique. Prices are caused by those who have the money and spend it with enthusiasm, and as a result the recipients of the smallest pajamas suffer.
“We welcome people who are in absolute poverty and who cannot buy necessities, but it is certainly not half of Lithuania – if it is or is a child, that he is in poverty.
Statistics show that about a tenth of the Lithuanian population lives in this way, so about 200 thousand. are in a difficult financial situation “, – the statistics were provided by an economist.
Competitiveness is at stake
According to N.Mačiulis, in an economically difficult period, it helps to survive. For example, a larger circle of people can receive compensation for heating, and the rise in the price of heating has not pushed them into poverty.
The economist added a remark about the other side: “The function of compensation, social benefits and support will never be a goal for any state to create a dignified life. Even those living in Sweden do not feel very dignified. The function is not to ensure a luxurious life, but to ensure that one does not go hungry. ”
Nevertheless, N. Mačiulis said that the fact that the income of the population is not growing fast enough poses many problems. Even rising prices have supplemented the state budget and increased opportunities for social benefits – pensions will increase this year, and the purchasing power of seniors has not decreased.
The economist sees another serious challenge: “If prices rise faster than in other EU countries, we will lose competitiveness and lose buyers in other world markets.”
Although global trends are affecting many countries in the world, the Baltic countries are facing a crisis in energy resources and raw materials and labor shortages, and rising labor costs.
As wages grew by 9.5 per cent over the five-year period, producers’ costs began to put pressure on them and some companies became uncompetitive. “If we look at it a decade ago, in the structure of GDP, wages were about 30-35 percent, and in 2021. rose above 50% and surpassed the EU average. “Such a part of the GDP” pie “is already taken by the workers, and they are certainly not disadvantaged,” the economist said.
At that time, A.Vizickas stated that we should compare the wages of our country and the prices of goods and services with Germany. According to him, the price level in Lithuania is already approaching the European average, but the salary is lagging behind.
However, N.Mačiulis strongly disagrees with that – although salaries in Lithuania are not equal to Germany, there are differences in the field of services, therefore the differences are not so great.
“If we talk about the dangerous trends we are seeing, the prices of raw materials and energy are moving in the world for services and goods. These countries, such as Poland, are taking certain actions – the VAT on food products, as well as fuel, has been reduced for half a year, ”the head of Pricer.lt explained.
He also added that Poland has the opportunity to devalue its currency. Such political and economic decisions of Poland, according to A. Vizickas, prove that the state intervention is also necessary for “second-rate Lithuania”.
A.Vizcikas shared another observed trend: “Available to such a level that I worked I worked, but I can’t buy anything. There comes a moment when central banks start reviewing rates, even though the European Central Bank is not yet planning to do so, the banks in the surrounding countries are already doing so and this will affect the size of the loan. ”
The representative of Pricer.lt notes that inflation in the Baltic States is higher than in the EU as a whole due to the lack of modernization in the energy sector. This means fewer products will be produced, as well as lower mark-ups and reduced wages or jobs.
The Polish example does not inspire
“Economic alphabetism is emerging here, everything Poland is doing is the opposite. I look with horror at what our neighboring country is doing and I pray that Lithuania will not go down such a path, it will not go on such a populism, radicalism the way Poland has traveled, ”N. Mačiulis shared his thoughts.
“I’m not talking about a restrained media anymore, as it mentions all the foundations of democracy, but economic governance is nonsense,” he said. He also added that currency devaluation is a solution for poor and developing countries that further impoverishes the population: “Thank God that Lithuania no longer has a currency to devalue.”
According to the economist, the tax breaks introduced in Poland also impoverish the state. Moreover, an EC study for a year shows that the reduced tariff applied there a few years ago did not reduce food prices.
“A statement by the Polish leadership with serious problems related to popularity, conflicts with the EU and trying to recover it with absurd economic policy measures,” Mačiulis said.
However, the economist is convinced that the rational solutions are the ones chosen by Lithuania: increasing the NPD or compensating for heating – earns less than 500 euros, does not have to pay more than 10 euros for heating.
“It is possible to discuss that there would be a constantly lower VAT rate for food products, but here, too, it is necessary to say where the money will come from, as it would cost Lithuania 400 million. euros per year “, N. Mačiulis submitted another decision.
“We have now talked about Poland as Poland, which is making its own policy, but we have completely forgotten that such a policy affects Lithuanian consumption and Lithuanian business,” A. Visickas gave a different opinion. According to him, about a billion euros travel from Lithuania to Poland every year.
“It simply came to our notice then. Dainius Dundulis, the same owner of Norfa’s retail chain, has said that the problem for him is that he cannot be competitive with Polish business. When talking about Poland and its policy, we should think about whether these are the right decisions, but how it affects us, ”the head of Pricer.lt emphasized.
Nevertheless, N. Mačiulis acknowledged that no matter how primitive the Polish economy, it has a negative impact on Lithuania. According to the economist, Lithuanians spend about a billion zlotys a year, which is 300-400 million. euros. According to the economist, this is almost a tenth of food retail in Lithuania.