Latvia's Economic Growth Boosts Labor Market

Strategic Insights -

Latvia has seen significant economic growth in the first half of the year, with the number of employed persons increasing by 0.8 percent in the second quarter compared to the same period last year. The unemployment rate has also dropped to 6.7 percent, down from 6.9 percent in the previous quarter. This growth in economic activity has led to a surge in employment, with the workforce swelling by 0.5 percent year-on-year in the second quarter. However, despite the encouraging trends, demographic challenges and a dwindling working-age population are expected to cast a long shadow over economic activity and employment indicators in the future.

Key Takeaways:

  • In the second quarter, the number of employed persons increased by 6,900, or 0.8 percent, compared to the same period last year.
  • The unemployment rate dropped by 0.2 percentage points to 6.7 percent, according to the latest labor force survey data from the Central Statistical Bureau.
  • The State Employment Agency's registered unemployment data also showed a similar decline in unemployment.
  • The number of registered unemployed fell to a historic low of just above 43,000, with the registered unemployment rate decreasing to 5.0 percent by the end of July.
  • The workforce swelled by 4,800, or 0.5 percent, year-on-year in the second quarter.
  • The growth in activity was the main factor behind the significant increase in employment, while a smaller part of the improvement was due to the reduction in unemployment.
  • Demographic trends and the dwindling working-age population are expected to keep casting a long shadow over economic activity and employment indicators moving forward.
  • A contraction of 0.2 percent in the labor force participation rate is anticipated for both the current fiscal year and the subsequent one.

Statistics:

  • Unemployment rate: 6.9 percent (previous year), 6.7 percent (current quarter), 5.0 percent (end of July)
  • Number of employed persons: 6,900 (increase in the second quarter)
  • Workforce growth: 4,800 (0.5 percent increase in the second quarter)
  • Registered unemployment: 43,000 (historic low)
  • Labor force participation rate: 0.2 percent contraction anticipated for the current and subsequent fiscal years
  • Unemployment rate projection: 5.5 percent by 2029

Sources:

  • Trend News Agency (article)
  • Central Statistical Bureau (latest labor force survey data)
  • State Employment Agency (registered unemployment data)
  • Ministry of Finance (macroeconomic projections)