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Wednesday 19.09.2018 | Name days: Verners, Muntis

Anti-inflation plan to emerge if society, government and businesses are ready for it

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU, Andris Vilks

The Finance Minister Andris Vilks

The anti-inflation plan will emerge when the society, government and businesses are ready for it, the Finance Minister Andris Vilks indicates in the discussion organized by the business portal

Although a short time ago Vilks expressed that the anti-inflation plan is necessary and real measures have to be taken by the government in the second half of the year to limit the price climb, now the Minister points out there is no plan yet and it will be difficult to impose it on the society and businesses «from above».

Currently there are ongoing active discussions with entrepreneurs, the Bank of Latvia and other experts on what measures are necessary to offset further price gains. Most likely, guidelines will be prepared as a basis for developing cooperation among the government, businessmen and the society.

The key is to build cooperation and even implement it fragmentary, for example, by concluding agreements. It would be difficult to implement such a plan without discussions, dialogue and understanding. These are very delicate matters, whose answers lie only in dialogue and cooperation, Vilks asserts.

According to him, several directions in need of discussion have been outlined at the moment. Firstly, these are issues related to the communication and common understanding to prevent situations where residents, businesses and service providers are starting to respond too optimistically, boosting prices.

There have been years of crisis and certain areas of businesses might wish to attain greater breakthrough in business, even at the expense of increased prices. Also for long time, people have postponed purchases and have not fully realized their wishes, Vilks notes.

Secondly, issues related to regulated prices have to be looked at and, thirdly, given the small Latvian market, the Competition Council’s role and functions should be discussed, determining whether it has sufficient resources and information.

The Finance Minister also emphasizes that after such a deep crisis and salary reduction the issue of remuneration level is topical, especially considering the brain drain. Although presently we are carrying out fiscal consolidation and moving towards a balanced budget, it is necessary to look carefully at how we can approach the potential salary increase so as to avoid decline in competitiveness and pressure on prices, Vilks recognizes.

It should be understood that unique period awaits Latvia in the coming years; therefore, decisions and each step should be thoroughly assessed, the Finance Minister remarks.

However, the Latvian Food Traders Association CEO Noris Krūzītis believes that the government should work on anti-inflation plan as an option, so that in case of further price increases, businessmen would know in advance what the government will do and what will be required from them.

On the other hand, Swedbank’s chief economist Mārtiņš Kazāks is convinced that the anti-inflation plan is also necessary to form collaboration with the society.

Plainly speaking, the government has to sell the offer to the society. Yet this can be done only if it is clear what the offer provides. If the government puts forward a simple, clear statement of future actions and if the society and businesses see that the government implements the plan as well, then the entire event will be credible and the society will support it, Kazāks says.


Leave a reply

  1. Rye says:

    I believe people are ready to that a long time ago.

  2. Kameryn says:

    No quesoitn this is the place to get this info, thanks y’all.

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