Latvia’s economy was developing rapidly last year. Even after a rapid increase of 2011, Latvia’s perspectives were still carefully assessed in regard to the economic growth in Eurozone in 2012.
Latvia’s GDP increased by 5.2% in 2012, as concluded in the report of the experts of the Economy Ministry about the development of the National Economy.
“If we take only the macroeconomic indexes of the crisis period as the starting point for then and new, we can safely say that Latvia’s economy is currently developing very successfully and the crisis seems to be overcome, at least on paper. Economic growth rates are stable and the most rapid in Europe; export is at its all-time high’ recovery and growth is noted in all industries; unemployment rates are going down, etc.. A number of industries and many enterprises can be truly considered Latvia’s stories of success,” – notes Economy Minister Daniels Pavluts.
However, we would still like to achieve more – higher welfare, lower social inequality and better state management. At the same time, we need to carefully assess the progress we made in society and state. Our current economic growth is based on a balanced economic structure. Latvian businessmen have proven their ability to produce and export high quality goods that secure Latvia’s economic development. However, in order to support economic growth in a long-term perspective, one of the main objectives and challenges will be the increase of production in private and state sectors. This will be not only an important factor in increasing Latvian companies’ competitiveness, but also an additional condition for the increase of worker salaries, says the minister.
It is mentioned in the report that Latvia’s economy not only increased, it experienced structural changes, while state funds became more ordered.
Recovery of Latvia’s economy was noticed on an international level as well – international rating agencies increased Latvia’s credit ratings. This allows the government to reduce expenses on the maintenance of the external debt, as well as expenses on corporate credits.
Unfortunately, not all residents have felt the recovery of the country’s economic situation. In some cases, inequality has become even more apparent. Salaries are growing too slow, while the general level of unemployment remains high, reports the ministry.
And even though Latvia became more stable after the crisis, uncertainty in terms of development perspectives of the global economy force a careful assessment of the development of Latvia’s economy. Given the weak development of the EU economy, the ministry predicts Latvia’s economic growth will be more moderate in 2013 than it was in 2012; GDP growth is expected to be within 4%.