RIGA - Looking for fast growth, Latvia’s National Development Plan should specify that the country’s gross domestic product will grow 7-9 percent in the next few years, Latvian Chamber of Commerce and Industry (LCCI) members suggested during a May 24 discussion held by their organization.
LCCI believes that its proposals should be included in the National Development Plan, one which envisages that Latvia’s GDP will grow 7-9 percent during the next few years, the shadow economy will drop to 10 percent of GDP, and labor taxes will fall from 51 percent to 25 percent. LCCI Board Chairman Janis Endzins emphasizes that the plan’s motto – an economic breakthrough - will not justify itself without such ambitious plans.
The ministers in attendance, however, pointed out that such estimates would be unjustified.
Finance Minister Andris Vilks (Unity) in turn pointed out that it would be satisfying if Latvia’s GDP grew more than 5 percent in the next few years; however, he did not predict it to reach 7-9 percent, taking into account that the country’s economy will stagnate due to the euro area crisis.
Meanwhile, Economy Minister Daniels Pavluts said that ambitious plans can be set to move the country ahead; however, it is necessary to keep in mind that they may not be achieved. There is also another option - to plan realistically, but with some ambitious elements, said the minister.
Pavluts positively assessed Latvia’s 6.8 percent economic growth in the first quarter of 2012, however, he admitted that the country’s economy will probably grow slower in the second quarter of the year.
Environmental Protection and Regional Development Minister Edmunds Sprudzs said that the organization’s goal of 7-9 percent GDP growth is “cosmic” and emphasized that Latvia should focus on maintaining 5.5-7 percent economic growth during the next ten years.
In the first quarter of 2012, Latvia’s GDP, according to seasonally non-adjusted data, increased 6.8 percent from the first quarter of 2011, according to the Central Statistical Bureau’s flash estimate.
Growth in industry of 11 percent and in trade of 10 percent had a positive effect on GDP; also, the amount of collected taxes on goods increased 20 percent. The construction sector continues to grow as well.
Compared to the fourth quarter of 2011, the GDP increased 1 percent in the first quarter of 2012, according to seasonally adjusted data.