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Friday 23.08.2019 | Name days: Valgudis, Ralfs, Vitālijs
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Ministry: it is critically important for Latvia to strengthen competitiveness of its economy

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s economic growth has become considerably more rapid in 2017 and 2018 when compared to previous years.  Stable growth is noted for exports, investments, private and state consumption. Latvia’s GDP has grown around 4.7% in the first three quarters of 2018, BNN was told by Economy Ministry.

«In spite of good economic growth in Latvia, inertia will not be enough from now on – the government needs to continue work on enhancing competitiveness of its economy by providing businessmen with the necessary support so that they are able to raise productivity and international competitiveness. This is vital, because in open market conditions labour force costs tend to grow,» says Latvian Economy Minister Arvils Ašeradens.

Macroeconomic disproportions left from fat years have been prevented in Latvia’s economy. Additionally, the country has successfully reduced economic vulnerability risks towards domestic and foreign shocks. Low statу debt, state budget is close to balanced, and payments are balanced. Inflation is on a slight rise, but those are mostly factors from the side of supply. At the same time, rapidly growing labour force costs and slow productivity growth continue outlying the importance of global competitiveness of Latvian manufacturers for future growth, as detailed in Economy Ministry’s economic development outlook.

Increased economic activities will have a positive effect on the situation on the labour market – unemployment is in decline and employment is on a rise. At the same time, certain groups of residents, especially residents with low education and qualifications, older people and youngsters will feel improvement of the situation to a lesser degree.

It is expected that powerful pressure from demand will remain in the future, which could be reflected in a slight increase of the number of employed people. At the same time, the labour market remains affected by negative demographic trends and regional market differences, the outlook mentions.

Economy Ministry predicts Latvia’s GDP will grow by at least 4.5% in 2018. Economic growth will continue in 2019 but at a slower rate – around 3.2% or 3.5%. Growth rates in 2019 will be influenced by the growing uncertainty in the external environment – geopolitical situation in the region, uncertainty about Brexit, slower growth in EU member states, etc., the ministry reports.

The ministry has prepared an outlook for the development of Latvia’s economy that includes information regarding the most important economic and social indexes, industry development and external economic environment, and the government’s economic policy.


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