Deputies expected more ambition, dynamism, and concrete ideas from the Bank of Latvia.
At the beginning of the year, the outlook of experts, including those from the Bank of Latvia, on the country's economy was full of optimism, but with the onset of the crisis in the Persian Gulf, that optimism began to rapidly fade. Today, however, the President of the Bank of Latvia, Mārtiņš Kazāks, did not appear very downcast during a meeting with Saeima deputies from the budget and finance committee. He acknowledged that if the crisis in the Middle East drags on, economic growth forecasts will need to be revised. More precisely — they have already been lowered. "If we previously projected growth this year in the range of 2.5% to even 3% of GDP, we can now subtract 0.5-1%, and if the geopolitical situation worsens, economic growth will decrease further; however, we will still be in the positive," M. Kazāks expressed his forecast.
The President of the Bank of Latvia warned that the European Central Bank, in order to curb inflation — around 2% — may revert to the tried-and-true method of raising interest rates. According to M. Kazāks, controlling inflation is also in Latvia's interest, as inflation particularly hits low-income residents hard.
It is worth noting that the President of the Bank of Latvia, speaking about the plans of his agency, again mentioned the need for a "reform" of the oversight system for the non-banking sector. Specifically, M. Kazāks does not hide his plan to bring financial companies under the supervision of the Bank of Latvia, which is opposed by both the non-banking sector itself and the current regulator — the Consumer Rights Protection Centre. The final word on this matter will belong to the Saeima deputies. The deputies themselves did not hide their dissatisfaction with the Bank of Latvia's overly inert work.
"These are many things we already heard in January regarding legal entities, refinancing, but the problems remain the same. Therefore, to be honest, I wanted more dynamism, and regarding these macroeconomic forecasts, I still expect some concrete things and consultations, including on budget expenditure reductions," stated deputy Aiva Viksna from the United List.
More ambition and dynamism from the Bank of Latvia is also expected by the chair of the Saeima budget and finance committee, Anda Čakša (New Unity): "What I hear is that we lack ambition, even in these crisis conditions — to find a way to achieve good results more quickly.
