Bank of Latvia: Little short-term damage from Brexit

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Even though the UK leaving the EU following a referendum will have negative financial consequences, in the short term it won't bring significant losses to the Latvian economy, Uldis Rutkaste, an economist at the Bank of Latvia, told Latvian Radio Monday.

During the two-year period of leave talks there'll be uncertainty about the future of the United Kingdom, affecting the world economy, he said. However it won't affect Latvia directly in the shot term.

Latvia ships fewer exports to the United Kingdom as opposed to Russia, and the potential damage to the economy will be smaller than that of worsening relations with Russia.

Thus the short term the losses would be small and could amount to less than 1 percent of GDP, he said. However, Brexit could affect Latvia more substantially if the United Kingdom splits off from the EU and doesn't cooperate with it.

While PM Māris Kučinskis, appearing on Latvian Television's Rīta Panorāma Monday, said that Latvia's access to EU funds could be affected if the United Kingdom would assume a confrontational attitude towards the EU. However he said he thinks that the UK will seek reasonable solutions.

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