Uncertainty in the economy remains in Q4 2021 due to the current pandemic wave, a slowdown in the immunization rate and the emergence of new virus variants, as well as pressure from rising food and energy prices expected throughout next year, according to latest macroeconomic report by Finance Think.
The economic research and policy institute retains projections for GDP growth in 2021 at 4.1 percent. According to Finance Think, projections for next year are 4 percent. The report also analyzes GDP growth of 3 percent in Q3 2021. Finance Think believes this growth is due to consolidation of economic flows and the progress of immunization, however, the institute points out, growth was achieved on a still relatively low basis compared to Q3 2020, in which the economy shrank by 5.1 percent after government intervention to mitigate the pandemic impact.
“Growth in the Q3 2021 is on a broad basis, with a visible decline in the manufacturing industry (-5.8%), due to pronounced uncertainties in global and domestic economy, related to the growing impact of the delta Covid-19 variant and the slowing pace of immunization at the end of the quarter. Accordingly, gross investment remained at the level of a year ago (0.4%), while exports and imports slowed down (4.1% and 2.7%, respectively). Public consumption grew by 4.9%, which is a particularly high growth in the context of the intention for fiscal consolidation, but is in line with the deepening of the budget deficit with the July budget rebalance (from 4.9% to 6.5% of GDP),” reads the report. In addition, unemployment in Q3 2021 has slightly decreased to 15.7 percent, employment has slightly increased from 47.3 to 47.4 percent, which, according to Finance Think, indicates that the uncertainty in the economy has intensified its pressure on the labor market compared to previous quarters. The third quarter, says the report, saw further job loss in the manufacturing industry (around 3,000 compared to Q2), stagnation in hospitality (same number of workers), and consolidation in transport (6,500 jobs created) and trade (3,800).