IMF国际货币组织全球-Republic-of-Latvia_Selected-Issues_72页_2mb

报告摘要

Summary of Selected Issues Paper on the Republic of Latvia (August 2019)

Core Content

This paper analyzes the implications of Latvia's participation in global value chains (GVCs) for its competitiveness and exposure to external shocks. It also evaluates the impact of trade tensions and tariff shocks on Latvia's economy using a structural model that incorporates trade in value added (VA) and input-output linkages.

Main Points

A. Background: Latvia's Participation in Global Value Chains

Latvia is relatively well-integrated into GVCs, though less so than other Baltic countries.
Backward participation involves importing intermediate goods for domestic production and export.
Forward participation refers to exporting value added as inputs to other countries.
Latvia's GVC participation is lower than other EU countries, possibly due to lower human capital and higher unit labor costs.
Traditional trading partners (Russia, Germany, Lithuania, Sweden, Finland) contribute significantly to Latvia's backward participation, while Estonia, Lithuania, and Russia are important for forward participation.
The US and China have higher value-added weights than Lithuania and Russia, indicating greater influence on Latvia's competitiveness.

B. Assessing Competitiveness with Different REER Measures

Conventional REER measures competitiveness based on gross trade flows.
VA-REER accounts for trade in value added and reflects the impact of GVC linkages.
The VA-REER index has appreciated more rapidly than the conventional REER since 2010.
The appreciation of VA-REER is strongly correlated with the rise in unit labor costs (ULC), suggesting that competitiveness is heavily influenced by labor cost dynamics.
The gap between VA-REER and conventional REER is primarily driven by price differentials (about 70%) and weight differences (about 30%).

C. Exposure to Shocks in a World of Global Value Chains

A VA-REER appreciation has a negative and persistent effect on value-added export growth.
A 10% appreciation in VA-REER is estimated to reduce value-added export growth by 0.4% in the first year and 0.5% in the second year.
VA-REER appreciation also has a negative effect on real GDP growth, with a 10% appreciation potentially reducing the growth rate by 0.2 percentage points.
Tariff shocks from the US, China, and UK can have significant spillover effects on Latvia's value-added exports and overall competitiveness.
The impact of a 5.9% US tariff (Layer 1) on Latvia's value added is estimated to be 0.2%, which is four times higher than the impact on gross turnover.
Latvia's exposure to trade shocks is moderate compared to the EU average, with Germany showing the highest vulnerability due to its reliance on the automotive industry.

D. Conclusions and Policy Implications

The VA-REER index suggests that Latvia may be less competitive than indicated by the conventional REER.
Rising unit labor costs have negatively impacted Latvia's competitiveness in global markets.
Preventing misalignment between wage growth and productivity is crucial for maintaining competitiveness.
Trade tensions and tariff hikes can significantly affect Latvia's economy, especially in value-added terms.
Policies should focus on enhancing productivity, managing labor costs, and strengthening resilience to trade shocks through structural reforms and diversification.

Key Information

VA-REER is a more accurate measure of competitiveness in the context of GVCs, as it accounts for value-added flows and input-output linkages.
The gap between VA-REER and conventional REER is largely due to price differentials (GDP deflator vs. CPI) and weight differences.
Unit labor cost (ULC) is a major driver of competitiveness, with a strong correlation to VA-REER appreciation.
Trade tensions can have substantial effects on Latvia's exports and growth, especially when tariffs are imposed on key industries like manufacturing and automotive.
Germany has the highest exposure to trade shocks, while Latvia's exposure is moderate compared to the EU average.