Central bank cuts growth forecast, warns of «cooling» economy

Take note – story published 7 years ago

Latvijas Banka, the central bank, cut the country's growth forecast Friday from 2.3% to 2.0%. 

Long-time central bank governor Ilmars Rimsevics said various factors were to blame for the cut and claimed the bank had forecast such a scenario.

"In our professional judgement, taking into account the latest data, Latvia's economic growth this year will be a 2.0%," Rimsevics told journalists at a press conference.

He also said the central bank's inflation forecast had been revised down from 0% to inflation of -0.4% (in other words, deflation) with a return to inflation of 1.3% expected in 2017.

He called for "immediate" reforms in the health service and particularly the introduction of compulsory health insurance. However, with health minister Guntis Belevics resigning just a few hours earlier, that looks a folorn hope. 

The central bank also displayed a now-familiar graphic comparing the need for "structural reforms" to a stool with a broken leg.

"It is premature to talk about an economic crisis, rather the Latvian economy is 'cooling'," Rimsevics said.

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