The International Monetary Fund (IMF) has published the first post-program statement in relation to international financial aid offered to Latvia, which consists of a detailed report about the country’s economic growth and structural reforms.

The IMF notes that Latvia is going through a steady economic recovery, even though recent tendencies, which affected the dynamics of foreign demand, show a gradual slowdown of growth rates.

The organization states that there are timely fiscal adaptation measures of 2009 in the foundation of this steady recovery. Crucial decisions that were made in summer 2009, when government institutions made choices following timely fiscal correction measures, as opposed to «program scenarios», pulled Latvia from the economic recession.

Specific economic sectors, including manufacturing and export, continued growing in end of 2009 and continued showing an impressive climb in the following two years.

It is also said in the report of the IMF that Latvia preserves the strategic objective to join the Eurozone on January 1, 2014 and it can still reach all Maastricht criteria.

Both government institutions and the IMF project that budget deficit will be 2% of GDP in 2012, but positive state earnings in the first half of 2012 show that the end results can still be lower than that.

In accordance with EU fiscal discipline agreement Latvia takes up the responsibility to decrease structural deficit by 0.5% of GDP every year.

The IMF notes that Latvia’s government institutions have taken it up measures the increase financial supervision.

At the same time, Latvia’s government institutions have set the decrease of the high unemployment rates and improving competitiveness as the main priorities of the future, IMF reports.

A significant reduction of the high unemployment rates can only be reached through targeted job market measures.

Even though unemployment remains high, employment is also high, exceeding the level before 2003, when the economic bubble only started forming, the organization notes.

Improvement of competitiveness, on the other hand, is dependent on productivity improving reforms. A similar situation applies for educational and administrative reforms – increasing the competitiveness of the market and strengthening the legal system will be essential elements in order to maintain the overall competitiveness of the economy, the IMF notes.

Ref: 103.109.109.2816