National Press Club

Latvians Predict Economic Recovery

April 25, 2009 | By Peter Hickman

Ilmars Rimsevics, governor of the Bank of Latvia

Ilmars Rimsevics, governor of the Bank of Latvia

Photo/Image: Kyle McKinnon

Though hard hit by the global financial crisis, as were many other countries, Latvia is "well positioned to recover," two of the Baltic nation's top financial officials told an April 24 Newsmaker.

Minister of Finance Einars Repse and Bank of Latvia Governor Ilmars Rimsevics traced the financial ups and downs of the country from a period of "excessively rapid" economic growth since joining the European Union in 2004 to an "abrupt hard landing" in 2008.

Rimsevics said weaknesses in the Latvian banking system "brought one of our largest banks to the point where the government had to step in" to rescue it, but that only one bank in the country actually failed.

Repse predicted that the Latvian government will come out of the country's financial roller coaster ride "in a more efficient form"

Both Newsmakers agreed that structural reforms, wage deflation, an unchanged currency peg and joining the Euro Zone in 2011 are the "cornerstones of Latvia's current stabilization program."