Release date 16. April 2021

Employment Rising Despite Mini-Easter Lockdown

On Slovenia's Economy

• February's gross salaries at legal entities were higher year-on-year, mainly due to paid bonuses in the public sector (connected to epidemics), as well as the statistical peculiarity that has accompanied us since the number of employees waiting for work increased (this inflated the wage growth more than appropriate). As an example, we can cite the fact that last year, with a 0.6% decrease in employment and a 5.8% increase in the average gross wage at legal entities, the mass of gross wages increased "only" by 1% (source: Bank of Slovenia). Due to the parallel growth of employment and the average salary in public sector, the growth was mainly present in public services, while the private sector reduced the wage bill in the economy. Payments to the state (job retention schemes) are also included in this number, and thus this data is more relevant when looking at the dynamics of household income trends.
• The Employment Service of Slovenia published the latest unofficial data on the number of unemployed on Wednesday (14 April). Their number fell further, below 81,000. Given the circumstances (Easter lockdown between 1st and 11th April), this is a minor positive surprise. According to data on tax certification of invoices, sales at the end of March and the beginning of April were higher by around 3% compared to the same period in pre-crisis 2019, which is also associated with increased sales before re-closing some stores and the Easter holidays. Truck traffic on Slovenian motorways (domestic: + 2%, foreign: -14%) and electricity consumption (-6%) were lower at the beginning of April compared to the same period in 2019. The lag in traffic is also associated with the distribution of the Easter holidays, and lower electricity consumption with restrictive measures that have been in force between 1 st and 11th April (source: IMAD). 

      Read also in the attachment about:

• February’s average gross wage
• Value of construction output
• Exports of all services
• Direct investment
• Gross debt to the rest of the world
• Detailed data on exports of goods by country

On EU-27 

• The traditional spring forecast of the Vienna Institute for International Comparisons (WiiW) is based on the assumption of a 3.8 and 3.7% GDP growth of EA-19 in 2021 and 2022, a stable EUR/USD exchange rate (1.15 in both years) and the price of a barrel of oil at 65 USD (2021) and $ 60 (2022). Despite the deterioration in autumn/winter pandemic numbers, the countries of Central and Eastern Europe applied restrictions to a lesser extent than in the first wave in December, leading to higher excess mortality (compared to other developed countries), but the economies suffered less. Kazakhstan, Macedonia, and Poland thus recorded the highest excess mortality in the region, the lowest Lithuania and Estonia. The region is expected to strengthen less than the euro area over the next 2 years, mainly due to the lower importance of services in the economy (which also led to milder declines in 2020). For Slovenia, WiiW forecasts 3.6 and 4% growth in GDP for 2021 and 2022, for Croatia 4.5% and 4.6% (greater importance of tourism), for Serbia (5% and 4.4%) and for Montenegro (6.5% and 5%). The Institute thus mainly lowered its growth forecasts for the current year and increased growth for the following year, mainly due to delays in vaccination dynamics in the region. Consumers prices should not rise much in Slovenia. For 2021, the general price level is expected to increase by 1.3%, in 2022 by 1.7%. More at: https://wiiw.ac.at/wiiwforecast-reports-ps-50.html (note: only available to subscribers)

    Read also in the attachment about:

• Industrial production in the EU-27
• US retail sales

Must Read of the Week

• Current Economic and Financial developments in Slovenia (available at: https://www.bsi.si/publikacije/gospodarska-gibanja-in-projekcije/gospodarska-in-financnagibanja, only in SI)

Comment: This report brings a comprehensive overview of the latest economic data. A very interesting feature of the report are the boxes e.g. the one that compares economic circumstances in USA and EA-19, one about labour markets and an in-depth analysis of the influence of pandemics on employment across different profiles (age, education etc.).

Forecast of the Week

• Apr 2021 consumer sentiment (Statistical Office of RS): -2 m-o-m

Comment: Time of survey (1st half of April) coincided with this year’s Easter lockdown which probably somehow depressed mood of respondents. Most retailers were still opened during this period but schools and kindergartens were closed (some exceptions).    

Quote of the Week

"He who lives by the crystal ball soon learns to eat ground glass.”
(Edgar R. Fiedler)

More information at: bojan.ivanc@gzs.si

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