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Wages in Lithuania skyrocket further, experts warn on structural issues

Xinhua, November 26, 2016 Adjust font size:

Average monthly gross wage in Lithuania has increased by 7.9 percent in the third quarter this year, compared to the same 2015 quarter, Statistics Lithuania announced on Friday.

According to the Baltic country's statistics department, average monthly gross wage last quarter was 793.3 euros (841 U.S.dollars). Average monthly net salary increased by 8.2 percent and reached 615.9 euros.

Gross wages in the public sector amounted to 806.6 euros, while in the private sector - to 786.7 euros.

In the third quarter 2016, against second quarter, real earnings in the whole economy grew by 3.2 percent; in the public sector by 3.4 percent, in the private - by 3.1 percent.

The increase in earnings in the period was influenced by larger volumes of work, increased minimum monthly wage (since January and July 1 2016), increased wages for healthcare workers and other reasons, statistics showed.

Local economists pointed to increasing structural imbalances in the Lithuanian economy.

Increase of minimum wages and growing need for the new workers were behind the wages hike, Tomas Siaudvytis, senior economist at Lithuanian central banks' macroeconomic department, said in the commentary released by the bank.

"Employees realize that they are needed by the employers, therefore, they are bolder in requesting higher salaries; on the other hand, companies face some difficulties while keeping their current employees and finding new workers, thus they more often accept employees' demands," Siaudvytis noted.

In his words, the current labour market situation in Lithuania also reflects some productivity issues.

"It is important that, alongside with the wages' increase, the quantity of goods or services produced by the employee raises as well, which would mean improved productivity," Siaudvytis added.

In his words, productivity growth in Lithuania has been slow recently, while wages grew faster.

Shortage of qualified employees in Lithuania is being observed due to structural problems, such as high emigration rates, decreasing numbers of young workers and shortages of local education system, Siaudvytis added.

The Bank of Lithuania noted earlier this year that growth in wages and salaries in the country has outpaced labour productivity for three years already.

Meanwhile, the International Monetary Fund repeatedly said that wage growth has been high relative to productivity gains in Lithuania and urged to monitor the issue in order to maintain the country's competitiveness. (1 euro = 1.06 U.S. dollars) Endit