11 Sep 2017 09:41 |Category:  LAT English 1st page news

It is not wise to draft budget with deficit – Swedbank

RIGA, Sep 11, BNS - It is not wise to draft budget with a deficit right now, said Swedbank’s chief economist Martins Kazaks in an interview with the Latvian public television on Monday.

He explained that Latvia’s economy is in the growth cycle that will last for a couple of years, but a fall will follow then.

"One should always look ahead in the economy," he said.

Kazaks noted that Latvia’s biggest problem right now is the labor market, and the wage growth is too steep. "We are starting to lose competitiveness, our good become too expensive. As we are a small and open economy, we depend on exports, but if the goods are too expensive, it is difficult to export them, and it will drag the economic growth down," said Kazaks.

According to latest Swedbank’s forecasts, in 2017 Latvia’s gross domestic product (GDP) might growth 4.2 percent, while next year the growth is projected at 4 percent, and in 2019 at 3.2 percent.

BNS, +371 67088611, zinas@bns.lv

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