Nominal versus Real Convergance Rozalia Pal Nominal Convergence
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Nominal versus Real Convergance Rozalia Pal
Nominal Convergence Bulgaria Czech Rep Hungary Latvia Lithuania Poland Romania Long term interest rate (12 month average of 10 yr Inflation HICP Oct 13 bonds) max 3. 9% (at (% yoy) max 2. 5% ERM II (most 1. 5 pps higher Budget deficit Governmental member (min 2 most 2 pps higher than 3 best to GDP (%) Debt to GDP (% ) yrs as of q 1 than 3 MS with 2013) performers'avg) 2012 (<3%) 2012 (<60%) lowest inflation) -1. 1 0. 8 18. 5 No 3. 71 0. 8 4. 4 45. 8 No 2. 33 1. 1 1. 9 79. 2 No 6. 13 Yes 0 1. 2 40. 7 (01. 2014) 3. 29 Yes 0. 5 3. 2 40. 7 (01. 2015) 3. 90 0. 7 3. 9 55. 6 No 4. 02 1. 2 2. 9 37. 8 No 5. 75 Source: Eurostat 2
Real convergence: Labour productivity and labour utilization real convergence in terms of labour productivity: 1. Labour productivity: improved relative to the Euro Area, mainly due to the expanding shares of more productive sectors in total output and due to the decline in overall employment (increasing labour efficiency). 2. Labour utilisation: strong mismatches in the labor market. Increasing need of skilled labour 3
Source: Eurostat 4 s at e a ar e 100 St ro 27 120 d ni te Eu ia tia ak EU ov Sl ia ic en oa Cr ov Sl a ni bl pu Re ua nd la 100 U ec h Cz Li th ey rk ry a ia ni ga Po Tu un H to Es tv La ia ni a ed o ac an ia ar 60 M m Ro lg Bu Real convergence: Labour productivity GDP person employed 160 146. 9 140 107. 9 80 50. 1 40 20 0
Real convergence: Labour productivity 150. 0 Lithuania: 141. 8 140. 0 Latvia: 131. 4 Slovakia: 131. 9 130. 0 Poland: 127. 5 Bulgaria 124. 2 Romania: 123. 1 120. 0 Czech Republic: 112. 4 110. 0 Hungary: 104. 0 100. 0 2005 2006 2007 2008 2009 2010 2011 Source: Eurostat 5 2012 2013 2014 2015
Competitiveness: Real Labour Cost Growth 2005 -2012 Source: Eurostat The data covered in the LCI collection relate to total average hourly labour costs and to the labour cost categories "wages and salaries" and "employers' social security contributions plus taxes paid minus subsidies received by the employer" 6
Real convergence: Labour productivity: GDP person employed Source: Eurostat 7
Employment structure: mismatches in the Romanian labor market. Need of skilled labor EU 27 Employment share from total population 44% 11% Unemployment rate Romania 44% 7. 5% Source: Eurostat 8 Bulgaria Czech Rep Hungary Poland 41% 47% 40% 42% 13. 1% 7. 0% 10. 1% 10. 4%
