Latvia

Economy to contract again this year

Although recent figures are starting to show incipient signs of improvement, the economy remains deeply mired in recession. Accordingly, panellists see the economy contracting again this year following on the economic debacle experienced in 2009. In fact, the country will not be able to return to positive growth until 2011. Meanwhile, the government has recently announced a battery of measures to reduce the largest deficit seen in over a decade, in order to comply with the compulsory requirements to obtain financial support from the IMF. The large fiscal deficit, which widely exceeds the Maastricht criteria, is threatening prospects of accessing the Euro zone in 2013, as intended by the government.