Slowdown of inflation in Latvia is expected in the II half of the year

According to estimates of the head of the Latvian Central Bank, Martins Kazaks, in the second half of this year, inflation will start to gradually abate. It reached a recorded grade of 8-9% amid the active reclamation of the Latvian economy from the crisis caused by the coronavirus infection and a sharp increase in energy costs. As the economy stabilizes, inflationary pressing will decrease. However, the head of the Central Bank believes the Latvian Bank will strive to maintain inflation at a level not exceeding 2% in the future, which is the target value set for the Eurozone countries by the European Central Bank. According to Kazaks’ estimates, Latvia’s GDP will grow by 4% this year. He expects some instability in economic establishment amid the uncertainty surrounding the spread of new strains of COVID-19. The central bank head is worried about the expected increase in economic inequality of the population against the background of accelerated growth in the incomes of wealthier citizens amid falling incomes in the industries most affected by the pandemic. This situation calls for the use of new tools, such as improving skills to increase earnings.

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Arseny Kudrin

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