RIGA - Latvian President Valdis Zatlers and Prime Minister Aigars Kalvitis both said spending must be cut significantly to restrict inflation in Latvia during interviews, Oct. 1 and that all residents and institutions must save money.
"Everybody must participate and everybody must reduce expenditure," the president said in an interview with 900 Seconds TV show.
"If we have raised wages by 20-30 percent, even by 40 percent this year and inflation.. is at 10 percent, then, obviously, we have to reduce spending for at least a year and cut expenses considerably to stop the process," Zatlers said.
The president pointed out that every country that has "emerged from inflation", has achieved it by cutting spending, and that everybody must be involved.
Prime Minister Aigars Kalvitis told journalists it was difficult to predict how high inflation will be at the end of this year, sparking speculation that it could rise well above its current 10 percent figure, and adding that it largely depended on "how prepared we will be to save our money."
The prime minister urged people to avoid unnecessary spending to prevent domestic consumption from growing even further.
"It is clear that global market trends concerning both oil products and food are very bad, and if we fail to restrict our domestic consumption boom, risks will be very serious," the prime minister warned.
Kalvitis also pointed out that it would be totally wrong to assume that it was only up to the government to fight inflation. It is a responsibility of business and individuals too, he said.
To counter surging inflation, the government approved an anti-inflation plan in May. The plan provides for changes in lending policies, in the real estate market, and tax policy, but appears to have had little impact as yet.
According to the data of Latvia's central statistics office, Latvia's annual inflation hit 10.1 percent in August.