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2020/05/29 / Erste Group Research

CEE Special | CEE labor market specifics


Increase in unemployment rate seems just matter of time. Croatia, Romania and Serbia are likely to see double-digit average unemployment rate (close to 10% in Croatia and Romania and around 12% in Serbia). In other countries, such as Hungary, Poland and Slovakia, we expect 2pp to 3pp increases of average unemployment rates to around 7 % in Hungary, 7.5% in Poland and 9.5% in Slovakia. Such a development is likely to be spread over time, however, and the extent of the final labor market impact will depend on a many factors.

As far as the CEE region is concerned, the termination of a contract is lengthy and the notice period in the case of permanent contracts is usually counted in months. March layoffs would thus be visible in the unemployment statistics with a couple of months delay. Further, the outflow from employment does not have to necessarily turn into inflow to unemployment. The inactivity rates could have gone up visibly in CEE. It is also not clear to what extent the self-employed will register themselves as unemployed if not entitled to unemployment benefits (insurance is voluntary in some countries). Within CEE, the structure of employment (services vs. industry) may be another factor determining changes in the unemployment rate. On the other hand, the possibility of teleworking may reduce the negative impact. The size and effectiveness of government support may also help to sustain employment.


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General information

AuthorErste Group Research
Date2020/05/29
Languageen
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-
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