Annual Review Meeting Operational Programme

Transcript:Annual Review Meeting Operational Programme:
Annual Review Meeting Operational Programme «Growth and Employment» The Ministry of Finance 22.11.2023. 2. Strategic aspects of implementation 2.1. Overall economic outlook, achievement of strategic objectives and CSRs (current situation and prognosis); 2.2. Main findings of evaluations performed in 2023; 2.3. EU Strategy for the Baltic Sea Region (EUSBR). State of play of cooperation activities in the region. 2 2.1. Overall economic outlook, achievement of strategic objectives and CSRs 3 Source: CSB, MoF forecasts 4 External demand slows Latvian economy because of swift increase of ECB’s interest rate, and domestically households tend to consume less in 2023 Average inflation in 2023 is forecast at 10%, decreasing to 2% at the end of the year. In 2024, average inflation will reach 2.2% 5 Source: CSB, MoF calculations Contribution to annual inflation, % CPI y-o-y change, % The slowdown has not been felt in the labour market, unemployment continues to decrease, wages are growing rapidly, real wage turned positive in the Q2 Source: CSB Employment and unemployment, LFS Average gross wage by sectors in 1H of 2023, euro and changes y-o-y, % Real and gross wage dynamics, y-o-y, % 6 The construction industry was negatively affected by rising costs and uncertainty about future developments, first half of 2023 comes with noticeable increase Source: CSB, Eurostat +0,6% +6,4% 8 Higher investment activity will be one of the main drivers of economic development in 2023 Source: CSB, MoF Changes of gross fixed capital formation by asset type mln euro and % (RHS) , y-o-y EU funds and Recovery and Resilience Facility (RRF) national budget expenditure forecast for 2023-2026, current prices, mln euro Government policies to overcome energy and inflation crisis have been successful Temporary state support to cover increased energy and inflation costs to individuals, households and companies ( 1.5% of GDP in 2022 and 1% in 2023), including SAFE amounting to 60 mio EUR; Review of income tax, pensions and social benefits Social indicators have slightly improved: % of people at risk of poverty or exclusion and/or people living in households with very low work intensity, remain stable from 2021 (26.1%) to 2022 (26%). % of children (aged less than 18) at risk of poverty or social exclusion – 2021 (20,1%) to 2022 (19,8%) People at risk of poverty or social exclusion by age (65 year or over) – 2021 (45,9%) to 2022 (42,6%) Overall energy consumption has decreased - gas by 40%