Wages in Lithuania last year grow at fastest pace in 8 years

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Wages in Lithuania last year grow at fastest pace in 8 years

VILNIUS – Average monthly net wages after taxes in Lithuania grew by 8.2 percent in 2017 compared to the previous year, at the fastest pace in 8 years, data from Statistics Lithuania showed on Monday.
In the last quarter 2017 compared to the same period the year earlier, average monthly gross wages grew by 7.5 percent and amounted to 884.8 euros, statistics office said in a statement.
“The main reasons behind wages growth remain the same, shortage of skilled workers and favorable economic environment. In order to maintain workers or to find new employees, companies must pay more,” Tadas Povilauskas, an analyst at SEB bank in Vilnius, was quoted as saying in the bank’s statement.
According to the statistics, average monthly gross wages growth increased last quarter by 6.7 percent in public sector and by 8 percent in private sector.
“It will become increasingly difficult to find qualified workers for the public sector,” Povilauskas noted.
Real wage growth adjusted for inflation slowed in Lithuania due to higher price growth. Real wages grew at a rate of 5.7 percent in 2017, down from 7.7 percent in 2016.
Generally growth was quite strong across all industries, Statistics Lithuania said.
“Labour market remains tight and it is becoming an increasingly important factor limiting activity for many businesses. Although immigration from neighbouring countries has increased recently, it is still insufficient to alleviate rising pressures in the labour market, thus strong wage pressures are expected to persist,” Lithuania’s Swedbank said in a separate statement.
Swedbank expects wage growth to ease to 7 percent throughout this year as the private sector will have less room to raise wages due to rising competitiveness concerns.
“However, the public sector wages can still grow faster as public pressure to raise wages that have been dormant for a long time is strong,” the statement read.

Source: Xinhua

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