Bogdan Tudorache

The unprecedented increase in the inactive population since February has led to the disappearance of more than 30 million employees from official unemployment statistics in twenty-five OECD (Organization for Economic Co-operation and Development) countries and emerging markets, according to an Euler – Hermes analysis.

“In Romania, the official unemployment rate reached a maximum of 5.3% during July-August and, although it decreased slightly, it remained at over 5% in September. In reality, however, the actual number of unemployed could be higher, given the able population, but which does not meet the conditions of the ‘unemployed’ category and is not included in the statistics. Closely related to this indicator, consumption, through the evolution of retail sales, remains at 9 months above the level of September 2019 but slows its growth rate to below 4% after reaching a post-crisis peak in July (INSEE, series adjusted according to the number of working days and seasonality).

”However, the encouraging performance of retail trade (excluding motor vehicles and motorcycles) in the first 9 months of the year, up 1.7%, suggests a recovery after the second quarter drop. We expect that despite the spread of the pandemic, consumption and especially construction (and demand segments) will remain high throughout the year, with the forthcoming elections being able to keep these areas and the current level of unemployment at a reasonable level.

”Also, the expected budgetary adjustment measures are unlikely to occur this year. The timing and magnitude of the implementation will increasingly depend on the evolution of the pandemic risk that will dictate the pace of economic recovery,” said Mihai Chipirliu, CFA – risk director Romania, Euler Hermes.

Thus, the number of unemployed who have disappeared from official statistics since February 2020 varies from 2.4 million in France, Italy, Spain and Ireland, to 5.5 million in the US and up to 13 million in Brazil. Beyond the deterrent effect of pandemic, the sharp increase in inactivity can be explained mainly by the characteristics of the recession generated by Covid-19.