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2
real GDP growth, in %
Despite sluggish global environment …
7 8 UK USA Euro area China
Source: OECD (2016), Interim Economic Outlook, September.
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Labour shortages driving economic growth? Vasily Astrov - - PowerPoint PPT Presentation
Labour shortages driving economic growth? Vasily Astrov - - PowerPoint PPT Presentation
Wiener Institut fr The Vienna Institute for www.wiiw.ac.at Internationale International Economic Wirtschaftsvergleiche Studies Press conference, 10 November 2016 New wiiw forecast for Central, East and Southeast Europe, 2016-2018 Labour
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3
Quarterly real GDP growth, change in % against preceding year
… EU-CEE grows 1.5 pp faster than euro area
6 9 BG CZ HU PL RO SK 6 9 EE HR LT LV SI
Source: National and Eurostat statistics.
- 6
- 3
3 1Q 10 1Q 11 1Q 12 1Q 13 1Q 14 1Q 15 1Q 16
- 6
- 3
3 6 1Q 10 1Q 11 1Q 12 1Q 13 1Q 14 1Q 15 1Q 16
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4
Quarterly real GDP growth, change in % against preceding year
Western Balkans and Turkey also perform well, CIS countries ‘bottom out’
10 15 AL BA ME MK RS XK 5 10 15 BY KZ RU UA TR
Source: National and Eurostat statistics.
- 15
- 10
- 5
5 1Q 10 1Q 11 1Q 12 1Q 13 1Q 14 1Q 15 1Q 16
- 20
- 15
- 10
- 5
5 1Q 10 1Q 11 1Q 12 1Q 13 1Q 14 1Q 15 1Q 16
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5 6 8 Household final consumption Change in inventories Gross fixed capital formation Government final consumption Net exports GDP total
GDP growth in 2015-2018 and contribution of individual demand components in pp
Private consumption: the main engine of growth …
- 4
- 2
2 4 6 BG HR CZ EE HU LV LT PL RO SK SI
EU-CEE
Source: wiiw Annual Database incorporating national and Eurostat statistics; own calculations. Forecasts by wiiw.
'15 '16 '17 '18
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6 6 8 4 6 8
GDP growth in 2015-2018 and contribution of individual demand components in pp
… except in the CIS
Household final consumption Change in inventories Gross fixed capital formation Government final consumption Net exports GDP total
- 4
- 2
2 4 6 AL BA XK MK ME RS TR
- 16
- 14
- 12
- 10
- 8
- 6
- 4
- 2
2 4 BY KZ RU UA
Western Balkans + TR
Source: wiiw Annual Database incorporating national and Eurostat statistics; own calculations. Forecasts by wiiw.
CIS-3 + UA
'15 '16 '17 '18
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7
First half of 2016
Private consumption fuelled by growing wages …
HU LT RO 6 9 12 ption,
Source: wiiw Database incorporating national and Eurostat statistics; wiiw. AL BG CZ EE HR LV ME MK PL RS RU SI SK UA
- 6
- 3
3
- 3
3 6 9 12 15 18 Final household consumpti real growth in % Average monthly gross wages, real growth in %
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8 Unemployment and wage growth
… as labour markets improve almost everywhere …
2010 2011 2012 2013 2014 2015 5 6 7 8 Unemployment rate , %
CZ
0.5 1.0 1.5 2.0 2.5 3.0
CZ
Job vacancy rate, in %
2010 2011 2012 2013 2014 2015 2016 4 5 6 7 8 9 10 11 12
- 4
- 2
2 4 6 Unemployment rate , % Wages, real growth in %
HU
0.0 0.5 1.0 1.5 2.0 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1
HU
2016 4
- 8
- 6
- 4
- 2
2 4 Un Wages, real growth in % 0.0 0.5 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1
Source: wiiw Annual Database incorporating national and Eurostat statistics; wiiw forecasts.
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9 Unemployment and wage growth
… though not in the Baltics (jobs/skills mismatch)
Job vacancy rate, in %
0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8
LV
2010 2011 2012 2013 2014 2015 10 12 14 16 18 20 Unemployment rate , %
LV
Source: wiiw Annual Database incorporating national and Eurostat statistics; wiiw forecasts.
0.0 0.2 0.4 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1 2016 8 10
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- 2
2 4 6 8 Un Wages, real growth in % 0.0 0.5 1.0 1.5 2.0 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1
EE
2010 2011 2012 2013 2014 2015 2016 5 7 9 11 13 15 17 19
- 2
2 4 6 8 Unemployment rate , % Wages, real growth in %
EE
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Monthly gross minimum wages, in national currency, 2013 = 100
On top of that: hikes in minimum wages
Source: National and Eurostat statistics.
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Two reasons:
- (1) Labour productivity gains – unit labour costs grow less than wages
- (2) Rise in unit labour costs partly offset by squeezing profits
Why zero inflation despite strong wage growth?
170
Bulgaria as a good example
Source: wiiw Annual Database incorporating national and Eurostat statistics; wiiw own calculations; wiiw forecasts. 80 90 100 110 120 130 140 150 160 170 2010 2012 2014 2016 2018 Average monthly gross wages Unit labour costs, NCU GDP deflator
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Real change in % against preceding year, first half of 2016
Investment weakness – but only because of temporary dip in EU transfers
0.0 10.0 20.0 BG CZ SK
Source: wiiw Monthly Database incorporating national statistics; EU Commission; wiiw estimations.
- 30.0
- 20.0
- 10.0
EE HR HU LT LV PL RO SI GFCF growth GFCF growth without the EU transfers effect
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20 BG CZ HR HU LT LV ME MK RO RS RU SK TR 6 8 10
ated, % p.a.
HR ME MK RS UA 6 8 10
lated, % p.a.
Non-financial corporations, June 2016
No credit boom: reduced risks for the future
Households, June 2016
AL CZ EE HU KZ LV PL RO RU SI TR UA
- 4
- 2
2 4
- 20
- 10
10 20 30
Policy rate, PPI-deflate Stock of loans to non financial corporations, change in % against preceding year
AL BG CZ EE HU KZ LT LV PL RO RS RU SI SK TR
- 4
- 2
2 4
- 20
- 10
10 20 30
Policy rate, CPI-deflate Stock of loans to households, change in % against preceding year
Source: wiiw Monthly Database incorporating National Bank statistics; wiiw calculations.
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Fiscal stance in CESEE in 2016
Fiscal policy generally growth-supportive
AL ME MK TR 2 3 4 5
6/2015, in pp of
Restrictive
Source: wiiw forecasts. BA BG BY CZ EE HR HU KZ LT LV MK PL RO RS RU SI SK UA XK
- 4
- 3
- 2
- 1
1 2
- 3
- 2
- 1
1 2 3 4 5
Change in budget balance 2016/2 GDP GDP, real growth in 2016, in %
Expansionary
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Factors behind fiscal loosening
- disappointment with ‘expansionary austerity’
- low borrowing costs
25 30 Change in nominal GDP in % against preceding year Yield on Government bonds, % p.a.
First half of 2016
Source: wiiw Monthly Database incorporating national statistics; Eurostat; National Banks and National Ministries of Finance. 5 10 15 20 25 BG HR CZ HU LV LT PL RO SK SI AL BA XK MK ME RS TR BY KZ RU UA
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EU-CEE grows by about 3% – 1.5 pp higher than the euro area Elsewhere in CESEE, growth picked up as well Labour shortages drive wage growth and private consumption Main messages Labour shortages drive wage growth and private consumption But: higher wages do not translate into higher prices! Investment weakness only because of low EU transfers Fiscal policy supports growth
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EU-CEE: growth will remain strong
- labour markets will improve further
- investments should recover as new EU transfers become available
Western Balkans: growth will accelerate Outlook for 2017-2018
- but: weak export base remains a big problem
CIS will gradually recover (except Belarus)
- but: geopolitical risks high in both Russia and Ukraine
Turkey heading for a ‘soft landing’
- potentially risks a balance-of-payments crisis
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GDP growth, wiiw forecast for 2016-2018
2016 2017 2018 Romania 4.7 3.5 3.8 Turkey 3.3 3.0 2.7 Poland 3.2 3.5 3.3 2016 2017 2018 Latvia 2.4 2.6 2.9 Slovenia 2.4 2.6 2.9 Lithuania 2.3 2.6 3.0
Source: wiiw forecast, November 2016.
Slovakia 3.2 3.1 3.4 Bosnia and Herzegovina 3.1 3.3 3.5 Bulgaria 3.0 3.0 3.1 Albania 3.0 3.3 3.6 Montenegro 2.7 3.1 2.9 Kosovo 2.6 3.0 3.2 Croatia 2.5 2.7 2.8 Macedonia 2.5 3.1 3.3 Czech Republic 2.2 2.4 2.6 Serbia 2.2 2.5 2.5 Hungary 2.0 2.6 2.9 Estonia 1.6 2.2 2.3 Ukraine 0.8 1.9 2.4 Kazakhstan 0.4 2.0 3.0 Russia
- 0.8
0.8 1.8 Belarus
- 2.8
- 0.9
1.6
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