Chronic shortage of workers in Eastern Europe |
A chronic shortage of workers that pre-dates the coronavirus crisis could stymie future growth in Eastern Europe as a squeeze on labor precipitated by long-term emigration to Western Europe and a regional economic boom push up wages and inflation, reports Reuters. Employers in the manufacturing, information technology and construction sectors are seeking workers as investment and European Union funds flow in to the region. Eurostat methodology indicates three of the European Union's five lowest jobless rates in April, at 3.4% in the Czech Republic, 4.3% in Hungary and 3.1% in Poland. Meanwhile, inflation rates in these countries were three of the EU's four highest, including a 5.2% annual rate in Hungary and 5.1% in Poland. "Temporary demand-supply frictions due to the rapid restart of the domestic economy, (and) renewed tightening of labor market capacities expected in certain sectors combined with dynamic wage growth have increased inflation risks," the National Bank of Hungary observed after its May rate meeting. Andrzej Kaminski, an economist at Bank Millennium in Warsaw, said: "Labor shortages and the very hot labor market despite the pandemic is already reflected in inflation, and in Poland it can be seen in the prices of services. They are growing around 7% year-on-year and the pandemic does not slow it down much . . . Those labor shortages relate mainly to industry, manufacturing especially." |
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