Latvia Unlikely to Catch up with Rest of Europe

In Latvia GDP rose by 4.9% over the second quarter of this year, while over the same period in 2001 GDP rose by almost twice as much. These figures were published by the central statistical office of Latvia.

According to the News Today newspaper , prices rose by 3.3% over the first three quarters of this year while last year they rose by only 1.1% over the same period. Unemployment has also increased this year. In the first quarter 8.2% of the population was unemployed. There has not been such a high level of unemployment in Latvia for at least two years. The newspaper writes that the average salary in Latvia is now 123 lats (USD 205) although twenty years ago it was LAT 180.

According to a Rosbalt correspondent, the newspaper wrote that the slower GDP increase 'will put an end to promises of catching up with Europe over the next 25 years. That would only be possible with a steady GDP increase of 7-8%!'

However, the central statistical office has also reported on consistent policies of reform and their positive results. For example, profit tax on companies has been reduced from 25% to 15%. Also the level of foreign investment has doubled in comparison with last year.