The LFS-based unemployment rate rose slightly to 4.7% in Q1, up from 4.4% in Q4’18, according to figures of the statistical office. In annual terms, the most notable drop was registered by young people (15-24) where the unemployment rate fell to 7.4%, down by 4.5pps y/y, which was however attributed to changes in the age structure of society, rather than a rise in employment of young people. Meanwhile, the number of inactive persons increased by 2.8% y/y, underpinned by reasons such as retirement, studies and illness or disability. In the meantime, the employment rate dropped by 1.6pps y/y to 67.5% in Q1, while the labor force participation rate declined by 0.8pps y/y to 70.8%.
All in all, labor market indicators have slightly deteriorated in Q1, but nevertheless remained stable. We expect that labor demand and employment growth should continue to support private consumption, which will remain a key driver of GDP growth this year.