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Friday 22.11.2019 | Name days: Aldis, Alfons, Aldris

Analysts: Investors are pleased with the election results

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Investors are glad about the results of the Parliament (the Saeima) election results, because another outcome might be less certain, impede economic reforms and threaten the society with the International Monetary Fund (IMF), consider analysts.

Despite severe austerity measures, the Prime Minister’s and his coalition partners have managed to obtain majority seats in the Parliament instead of the previous minority ones, experts consider this a good achievement, reports LETA.

«Considering everything, the fact that the coalition has received support for their introduced austerity measures, is a considerable achievement,» tells Capital Economics emerging- markets senior economist Neil Shearing.

At the same time analysts warn not to rely on these results too much, pointing to a number of factors, ranging from the difficult history experience that has made Latvians more resistant to the electorate division.

Dombrovskis success can partly be explained by the fact that he is considered a «new face» in Latvia politics not directly guilty of the crisis.

«Dombrovskis political association’s Unity (Vienotība) positive results are connected with the unusual circumstances in the Latvian political system and because during the economic downturn they were a new political force,» the agency Reuters was informed by the independent political analyst Agnija Baranauskaite.

In her assessment, voters of Estonia and Lithuania, in 2011 and 2012 upcoming elections will punish the current parties of the introduced austerity measures, except if their economies start recovering very quickly.

Danske Bank analysts consider the election results a surprise, at the same time indicating that from the market point of view, this is a strong positive signal.

«The elections taken place at the weekend brought surprisingly great support to the current Prime Minister Valdis Dombrovskis, assigning him to form the government,» believes Danske Bank chief economist Lars Christensen.

«We see the results as a clear mandate to Dombrovskis to continue his effort in consolidating public finances and implementing Latvia economic reforms. The results can be viewed as a strong positive signal from the market perspective, and they should significantly reduce the political risks in Latvia and ensure the IMF/EU supported reform program continuation,» considers the analyst.


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