World and Latvia are not going to face such crisis as ten years ago - Dombrovskis

  • 2019-10-21
  • LETA/TBT Staff

RIGA - At present the world and Latvia are not likely to face such economic crisis as ten years ago, said European Commission Vice President Valdis Dombrovskis (New Unity) in an interview with LETA.

Participants of this week's meeting of the International Monetary Fund (IMF) and the World Bank (WB) were discussing the slowdown of the global economy and uncertainty, said Dombrovskis.

"The economy is cyclical and this has been one of the longest periods of growth historically. It is clear that this period of growth has reached its maximum, therefore the economy has started to slow down. Therefore the IMF and the WB meeting discussed what economic policy is necessary to reduce consequences of this slowdown," said Dombrovskis.

Asked whether the global economic slowdown may not turn into a crisis the world saw ten years ago, Dombrovskis said that there are discussions only about a slowdown. "The world's economic growth is still projected at 3 percent, while China's economic growth with all slowdown means a 6 percent growth a year," he said.

Dombrovskis admitted that there are quite many global risks that might deteriorate the economic situation, for example, trade conflicts, the situation in the Middle East, and others.

"Still, there are no talks about a crisis, there is no economic overheating, the financial sector is more stable than ten years ago. We do not see the same economic trends as ten years ago," he said.

Dombrovskis added that Latvia's economy is more balanced, there is no huge inflation or current account deficit. "Thus, we can speak about economic slowdown, not a crisis," said Dombrovskis.