Unemployment rate in 2018 at a 10-year low
Rapid economic growth in 2018 has translated into an even tighter labour market, exacerbating labour shortages and maintaining rapid wage growth.
The labour market continued to improve in a rapid pace in 2018 despite unfavourable demographic trends. The number of employed grew by 14.6 thousand (or 1.6% over the year) and the employment rate among 15-74-year-old reached 64.5%. Meanwhile, the number of unemployed decreased by 12.6 thousand, sending the unemployment rate to 7.4% (-1.3pp over the year), the lowest level in 10 years. As a result, labour force grew despite declining population.
Speaking of demographic trends, working-age population (15-74) is on a declining trend in Latvia and 2018 was no exception. However, the pace of decline has slowed in 2018. The number of people in working age decreased twice as slow as in a couple of previous years. Although we do not know for sure, it could be that migration trends are not as unfavourable as before.
We expect that the labour market will continue tightening in 2019. Labour shortage will remain a pressing issue for employers as well as sustain wage pressures. However, as the labour market is already pushed to its limits, the pace of improvement will slow. The number of employed will grow at a more moderate pace (0.6% over the year) and the unemployment rate will decline in a slower manner – to 6.7%.
For more information please contact Ms. Linda Vildava, +371 67444213, firstname.lastname@example.org
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