RIGA - Latvian Prime Minister Aigars Kalvitis has denied that the current administration is responsible for the country's current inflationary problems.
"Inflation is not the problem of the government alone. It is the problem of the whole economic environment and even the [whole of] society, as the government is only a single player in this phase," Kalvitis told BNS in an interview.
"If we look at the government's role in raising inflation, it is among the least important factors, as it was not us who pegged Lats to the euros and decided Latvian monetary policy, which automatically caused price increases," he said.
The prime minister added that the government's foreign debt is only 5 percent of GDP and it was not his government that borrowed one billion lats [1.4 billion euros] for private expenses.
Kalvitis went on to state that a situation with rising inflation but rapid economic development is preferable to a low inflation regime with no growth.
When asked about his inflation estimates for this year, he replied: "I am not a wizard. I think that the inflation should fall by the end of the year."
Consumer prices grew by 1.2 percent in July alone, while annual inflation is running at 9.5 percent 's its highest rate since February 1997.
Most economists believe that inflation in Latvia is unacceptably high, with no immediate prospect of a downturn.
Having batted away the accusations of economic mismanagement, Kalvitis turned his wrath upon the KNAB corruption watchdog, accusing it of excessive self-promotion.
"I want much more professional activities from KNAB, not PR activities. We often see the myth of huge scandals created, apparently for PR purposes, which a year later turn into nothing," the prime minister told BNS.
He added that the accusations of Latvian State Revenue Service Customs Criminal Board head Vladimirs Vaskevics 's who was targeted in a bomb attack - against KNAB are disturbing as well.
"I am concerned about this. The facts are disturbing. We know that the criminal world has always cooperated with the investigatory institutions. We can only talk of these facts until they are proven, but the facts themselves are disturbing," he said, adding that the accusations could have grounds.
