Mačiulis: For a long time, the Lithuanian people felt as good as today.

Swedbank economists have raised their forecasts for this year's gross domestic product (GDP) growth to 2.7%. With regard to the overheating index of Lithuania, the Lithuanian economy is not growing and the situation is quite different from that of before the crisis of 2008: the real estate bubble (NT) s & # 39 is then formed and inflation has exceeded 10%.

"Only the gap between wage growth and productivity growth indicates that the economy is rising, the country is losing competitiveness and export markets are more difficult to maintain. such a trend continues for several years, it is an alarm.Until here, exports have not significantly inhibited exports.This did not reduce the competitiveness of many Lithuanian industries and in particular Lithuanian companies, "said the economist.

Speaking of the housing market, he added that he was not overheated because house prices were not rising as fast as wages. If it was difficult to buy a home before the previous crisis, the price of housing is currently high.

"A middle-income family can buy a home with one-fifth of its income. It also means that the cost of borrowing is much lower, but there are no preconditions for rapid interest rate growth, so the indicators should not change much. . Apartment prices have been hampered by an increased supply of apartments, which means that buyers' purchasing power is higher, "he said, adding that this year, prices for apartments housing would increase modestly and new housing would be easier to buy in all Lithuanian cities.

According to Mr Mačiulis, in terms of crisis and danger, this hinders the willingness of the population to invest and thus slows or slows economic growth, but the expectations of the Lithuanian population are positive. Business expectations also show that the crisis is not eroding.

"In all sectors, we find that demand or businesses do not face economic problems. Expectations in all sectors began to fall in mid-2007, when government officials did not recognize the economic slowdown, many did not speak, and confidence indicators from all sectors fell. And only in 2008 was it recognized that the crisis would have a negative impact on Lithuania, although this has already been seen in the waiting indicators, but that does not exist at present, "he said. he declares.

The economist demonstrates that the consumer confidence indicator also peaked in January and that they are improving their financial situation.

"A long time ago Lithuanian people felt as good as they now feel. Which may seem strange, but that's it, he says.

According to the economist, last year, wages rose 10 percent, while price increases more than tripled wages. Thus, the purchasing power of employees and retirees has increased.

According to the economist, real wages after tax will increase by 11.5% this year. (7% last year) This is the fastest wage growth in the European Union and the highest in Lithuania since 2008. The average pre-tax salary is expected to increase by 8%. – Slower than last year, but the tax reform will have a positive impact on post-tax wage growth. Price growth is expected to be around 2.7%. Thus, according to forecasts, people's incomes in their pockets should remain higher. About half a percent The rise in inflation will be driven by rising prices for electricity and gas, but oil is expected to fall.
There are also positive trends on the migration front. It is expected that net emigration will be positive this year, that is, arrivals will be more than outgoing. This will be a positive boost for the labor market, domestic consumption.

"It will not be a huge leap, about 2,000 people can reach the population, but it's a historic step forward on the migration front," said the economist.

Moreover, according to Mačiulis, it is often said that Lithuania has too little redistribution of the budget, but in its opinion, redistribution is not a panacea in itself.

"In Switzerland, the budget is less redistributed by 28.5% and Ireland only 23%. This does not guarantee that an increased redistribution creates social equality, prosperity and prosperity, "states the economist, and stresses the importance of efficient use of available funds. .

The Sino-US trade war is most disturbing

World GDP growth is reduced to 3.5%. The situation is much worse for many important markets for Lithuania – German and French growth is expected to exceed 1%.

"It's not just a decade of crisis, but many indicators of economic activity indicate that their growth is either slowing down, or stopping, or even declining, as in Italy: We find that growth is currently the slowest in the last three years.

One of the most disturbing long-term trends, namely that the liberal world is a smaller part of the world, is not restricted. If these countries accounted for 80% of GDP? World GDP, currently only 30%. GDP. The weight of China, where there are no political rights, has increased considerably. A few years ago, Freedom House recognized that the United States was no longer part of the country guaranteeing freedom. (…) This is a serious sign when we see that most of the world's economies are no longer a free, or at least partially limited, democracy, "said Nerijus Mačiulis, chief economist at Swedbank.

According to him, the index of political uncertainty is correlated to that. First of all, the problems are related to protectionism in China and the United States, but also to tensions in Brexit, Italy and France. According to the economist, even if Brexit were in a worst-case scenario, Lithuania is not very dependent on the United Kingdom – we do not rely more on imports, but remittances, but these have recently decreased and have no significant impact on the Lithuanian economy. Mačiulis is convinced that Brexit is the British drama, and not the rest of the world: "The only healthy way – the second referendum – without deep economic and humanitarian crisis".

With regard to the Chinese economy, economic growth is slowing down, exports are declining, but so far the indicators are not dramatic. Destiny will depend on the end of negotiations with the United States. If China and the United States fail to reach an agreement and new import tariffs are introduced, the negative consequences would be lost all over the world, all financial institutions. As Mačiulis remarks, the Chinese are looking for information about the layoffs. Such indicators did not exist before other crises. "The Chinese people are therefore afraid of the shock that would affect trade with the United States," he says.

According to the economist, if the US does not increase import tariffs or do not intend to tax a higher import tariff from the Union Lithuania's GDP forecast will be further improved.

"There must be a wave of protectionism on the nationalist front, which we do not yet see. (…) The presentation may seem optimistic, but it is undeniable that Lithuania has evolved rather exemplary in this economic cycle. and that even in the event of an external shock, it is likely to avoid a recession, "says Mačiulis.