Economic crisis coming

  • 2008-05-30
  • In cooperation with BNS
RIGA- Currently the Latvian government  can only take short-term measures as experts do not provide long-term forecasts on further economic development, said Latvian President Valdis Zatlers in an interview with Latvian daily Neatkariga Rita Avize, admitting that the possibility of a crisis possibility is becoming more real in Latvia.
 "The largest problem is that experts do not provide any long-term forecasts on the further economic development. Everything that has happened with the food prices, the fuel prices, has not been predicted earlier. Everything the government can do today is short-term flexible measures," he said.

 Zatlers spoke on this crisis possibility, but many politicians say that Prime Minister Ivars Godmanis is the best premier Latvia could have in these conditions.

 "In crisis we should separate the things that can be influenced by the Latvian government and the things that should be considered in a global context and what the government cannot influence. They do not depend on Latvian businessmen or the good will of the Latvian population. There might be strokes, but they will not be related with the situation in Latvia. Many experts say that the situation can remain like that for many years," said the president.

 Regarding inflation expectations, Zatlers said that they were present in Latvia for the whole last year. "And not only Latvia is in such a situation. Look at the cover of the last issue of The Economist -- "Inflation is back". Inflation expectations in the world are just appearing. Maybe the fact that we have survived it already, will help us in the situation. We are expecting a positive result -- a possible drop of inflation in July or August. We are expecting positive results, as all the negative results have already come," said Zatlers.

Latvia has had a record high inflation -- in April this year as compared to last April consumer prices rose 17.5 percent, while the gross domestic product (GDP) growth declined to 3.6 percent in the first quarter of this year. Latvia's budget revenues in the said period are below the target.