IMF: Latvia must beware 'overheating'

  • 2006-05-31
  • From wire reports
RIGA - A mission from the International Monetary Fund has warned the Latvian government that the economy might overheat and that ministers must follow the situation closely. Meeting with Finance Minister Oskars Spurdzins on May 25, IMF representatives voiced concern over some side effects of the rapid economic growth 's which reached double digits last year to become the highest in the European Union.

The IMF mission was scheduled to meet this week with several specialists of the Finance Ministry to discuss progress in medium-term budget planning, the convergence program and absorption of EU structural funds.
The mission, whose objective is to collect data on macroeconomic development to draw up a report to the IMF board of executive directors, is expected to work in Latvia until June 6.

Spurdzins informed IMF representatives about Latvia's macroeconomic and budget situation and the development of the country's fiscal policy. Talks also touched on Latvia's foreign debt, current account deficit and inflation.
The finance minister pointed out that Latvia was interested in maintaining the ultra-high growth rate, as even before joining the EU, Latvia, which is the poorest EU nation on the basis of GDP per capita, set a goal to reach the average EU standard of living as soon as possible, and rapid economic development is the best way to achieve this goal.