Latvia: Economy will be fragile in 2023: central bank chief

While Latvia’s economy is generally resilient and the labour market remains strong with low unemployment, the economy will still face significant fragility in 2023, Martins Kazaks, president of the Bank of Latvia, warned, LSM reports. Speaking in an interview on LTV, Kazaks emphasised the need for economic transformation in order to avoid falling behind other countries. Also, he noted that Latvia’s current rate of inflation was still unacceptably high. Barring unexpected global events, inflation should drop to single-digit figures in the second half of 2023 and low single-digit figures by the end of the year, Kazaks projected. Wage growth should thus outpace inflation in the latter half of the year, allowing consumers to regain their purchasing power, he said.