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WEEK 53rd 2004

Wednesday, the 29th of December, 2004

Fight with deficit
Latvian government plans to reduce the budget deficit to 1.4% of GDP until 2008. According to Latvian convergence programme for 2004-2007, in 2004 fiscal deficit of the state budget should be 1.7% of GDP, in 2005 1.6%, in 2006 1.5% and in 2007 1.4% of GDP. The government plans that until 2008 the speed of Latvian national economy development will remain the same. GDP growth should be 8.1% in 2004, 6.7% in 2005 and 6.5% in 2006 and 2007.

A day before lat’s pegging to euro its rate reaches a record
Euro’s rate in Latvia reached its record level, LVL 0.71 for 1 euro. Experts suppose that one could evaluate whether this rate was favourable or not only after a couple of years. A representative of Nordea Markets, Andris Larins, thinks that it is difficult to define if this rate is profitable at present.

Tuesday, the 28th of December 2004

Offer decreases
During the last week of 2004 the price of privatization certificates increased at least twice and reached EUR 21.42. It could be connected with the future law on the end of privatization, in which large certificates holders try to protect their own interests. They have difficulties in selling large numbers of certificates. Banking experts think that the increase in price could be explained by the lack of offer in the market. In its turn, the lack of offer could be caused by the government’s wish to end privatization until the end of 2005.
Dienas Bizness

GDP-2005 is 7.5%
Economists Association – 2010 thinks that in 2005 economic growth in Latvia will continue, and GDP growth will be 7.5%. It might be promoted by an increase of domestic consumption in trade, commercial services and construction, as well as due to cheap credits and an increase in inhabitants incomes. The positive influence of additional investments resources from the EU funds is expected. On the other hand, an increase in import and growth of prices could disturb the GDP growth.
Kommersant Baltic Daily

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