Analytics, Economics, Latvia

Even though the future outlook on the global as well as the Latvian economy has become more positive, it depends greatly on the decisions that the Latvian government is soon to make whether optimism in Latvia is justified, said Kazaks.

The fall in the domestic consumption has become much slower since spring, whereas exports have been stabilizing and, in some areas, even increasing, said Kazaks. Further development may be unsteady, but if domestic consumption keeps shrinking faster than exports increase, the Latvian economy will continue to contract both this year and at the beginning of the next year.

Besides the risk of a repeat economic downturn in the world, which would affect Latvia's exports, other risks include the work on the 2010 state budget and the government's decisiveness and consistency in implementing its decisions and reforms, Kazaks pointed out.

Although there important structural reforms were launched this year, for instance, in public administration, education and healthcare, and the national economy is becoming more competitive, it is important that the structural reforms do not stop halfway through, and that implementation of these reforms is well thought out and timely, the reforms must also be explained to society, as is stated in the latest "Swedbank Economic Outlook".

Swedbank will present the newest "Swedbank Economic Outlook" and the bank's forecasts for the Latvian economy at the bank's head offices on September 29, as the bank's press secretary Kristine Jakubovska told LETA.