"The Latvian economy is quite strong and viable but, regretfully, the high economic growth rates that we saw in 2011 and 2012 are no longer realistic,” he said.
At the beginning of this year, the Bank of Latvia lowered its economic growth forecast to 2 percent from 2.8 percent.
"We would be happy if the growth rate was somewhat higher but it will still be insufficient to satisfy all spending wishes,” Rimsevics said.
The government cannot live in "a different reality” and spend money that it doesn’t have coming in, the governor of the Latvian central bank said.
He praised the Latvian State Revenue Service for its good performance in tax collection in the current complicated situation and repeatedly called for prudence in spending.
However, he was not asked how he could justify large pay rises for the central bank's own board while urging prudence to everyone else.
During the first quarter of 2015 Latvia's seasonally unadjusted GDP grew by 2 percent against the same period a year ago, according to a flash estimate by the Latvian national statistics office released in late April. Latvia's seasonally adjusted GDP expanded by 2.1 percent year-on-year in the first quarter of 2015 and grew 0.4 percent compared to the fourth quarter of 2014.