Today, President of Latvia Egils Levits met with the Governor of the Bank of Latvia Mārtiņš Kazāks. He underlined the importance of investing European Recovery and Resilience Facility and 2021-2027 Multiannual Financial Framework funding into the Latvian economy smartly.
Egils Levits and Mārtiņš Kazāks discussed the most recent economic forecasts. Special attention was given to the inflation rate which could reach 2 % according to projections. According to Governor Kazāks, this can be attributed to Covid-19 pandemic and its impact on the global economy. Head of the central bank also said he hopes that inflation will level out next year as soon as we have left the pandemic behind.
European Union coronavirus stimulus package for member states, which is comprised of impressive funding from European Recovery and Resilience Facility and 2021-2027 Multiannual Financial Framework, gives Latvia a good opportunity to make smart investments into restructuring of its economy, underlined both sides. President of Latvia and Governor of Bank of Latvia both agreed that investments should target long-term and sustainable growth, workforce education, R&D, reskilling to bridge skills and future needs gap. Governor Kazāks warned that by heavily investing into infrastructure in the short run, as is the case right now, economy might quickly overheat, so Latvia must pursue long-term goals and invest the available funding into restructuring of the economy.
Both sides also discussed measures against shadow economy in Latvia and the need to pursue more rigorous fiscal discipline due to rising foreign debt, which the state has amassed through huge bailout programmes rolled out during the Covid-19 pandemic.