Working Life Barometer in the Baltic Countries 2002 (pdf) - mol.fi

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The aim of economic policy of the government is to achieve sustainable,
stable and balanced economic and social development. Current scenario for
macroeconomic development in the medium term is based on the assumption
that the government will continue to implement the policy aimed at
maintaining that stability in the future. The cornerstones of this policy are
strict fiscal and monetary policies. The policy’s scenario envisages stable
growth, which will insure gradual convergence of Latvian economy with the
most developed European economies. In case of favourable conditions
Latvia’s potential for growth is even bigger; however, taking into account the
risk that could imperil faster growth, the scenario envisages average GDP
growth of 5.7% up to the year 2005.
Main economic trends
1998 1999 2000 2001 2002* 2003* 2004* 2005*
Growth rates, % over the previous period
GDP 3.9 1.1 6.6 5.5 5.5 5.8 5.9 5.9
Inflation 4.7 2.4 2.6 2.0 2.9 3.0 3.0 3.0
Employment
Real personal
0.6 -0.5 0.0 0.1 0.1 0.1 0.1 0.1
income 6.1 3.3 3.4 4.8 4.9 5.1 5.2 5.2
% of GDP
Current account
deficit
* - forecast
-10.6 -9.6 -6.8 -6.4 -6.1 -5.8 -5.2 -4.6
Economic growth in Latvia has been achieved in conditions of stable
macroeconomic environment. The exchange rate of the lats (LVL) for many
years remains stable against the SDR currency basket. This eliminates
uncertainty, reduces currency risk and provides businesses a stable base for
planning and price setting. The Bank of Latvia has decided to keep this
currency peg until the accession of Latvia into the European Union.
The average increase of consumer prices has not exceeded 3% for the last
three years, and in 2001 it shrunk to 2.5 percent. Tendencies in changes of
prices of the last years show stabilisation of the overall inflation level, as well
as reflect the structural changes in the relative prices due to the observed EU
convergence processes.