Latvia, by taking several not particularly complex steps, could achieve economic growth at the level of 4-5%, said the president of the Bank of Latvia, Martins Kazaks, in an interview with LETA, LETA reports.
He explained that the external situation significantly affects Latvia in macroeconomics. "Geopolitical changes are long-term in nature. Trade wars, of course, negatively impact us. Thus, the external environment is unfavorable," said the president of the Bank of Latvia, adding that at the same time, the economy of Europe and Latvia has proven to be quite resilient, and a deep crisis has not been experienced.
Kazaks noted that Europe is experiencing a slow but more confident recovery. One of the reasons is the acceleration of Germany's economy, which, gaining momentum, is pulling along other countries. Latvia is also aided by the fact that Scandinavia, an important trading partner, is gradually starting to grow after several years of stagnation.
The president of the Bank of Latvia stated that the Latvian economy is also beginning to recover. Unemployment remains low, wage growth is very rapid on average, and the economy is growing within 2-3%.
"This is still a moderate pace. This is warm water, and we are still far from hot. This growth of 2-3% is not enough for Latvia," emphasized Kazaks.
In his opinion, by implementing several not particularly complex measures that have already been discussed in previous years but simply not implemented, Latvia could achieve economic growth closer to 4-5%.
As one such measure, Kazaks mentioned simplifying the construction process. He explained that it is known which regulations need to be changed, and this has largely already been done, adding that it needs to be put into practice. "This could reduce both the time for issuing construction permits and their cost, and would allow work to be done faster and cheaper," said Kazaks.
He also emphasized that it is important to strengthen the role of Riga, build closer cooperation between the government and Riga, attracting new businesses to Latvia.
"There is one unique thing in Latvia that is not found in Lithuania or Estonia - the so-called knowledge mile. Riga has a sufficiently high concentration of universities and students. Allowing this segment to engage more actively in the flow of innovations could give Latvia a new impetus," said Kazaks, emphasizing that these things have been known for many years; they just need to be acted upon.
The president of the Bank of Latvia also noted that one should not be afraid of making mistakes, but rather act and see what works and what does not.
"We learn from mistakes, move forward step by step, see what works - we continue doing it, what does not work - we do not do. Unfortunately, the problem we observe is that people are afraid to experiment because they are punished for mistakes," said Kazaks, explaining that punishment should be for negligence, inaction, or malicious intent, and one must learn from mistakes; otherwise, it is impossible to move forward.
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