As the state of emergency has been lifted, it is evident that the economic recovery process will be gradual. Bank of Latvia has reported that the projection of Latvia’s GDP growth in 2020 is forecast at -7.5%, and economic growth is expected to rebound to 6.7% in 2021. The Foreign Investors’ Council in Latvia (FICIL) commends the actions of the Government and public sector in seeking flexible and even innovative solutions in the field of business activities during the Covid-19 crisis. In the latest FICIL research on the impact of Covid-19 on foreign investors in Latvia, many respondents mentioned the timely policy initiatives in relation to this crisis, as well as the overall response of the Government of Latvia as very positive.
At this point, regardless of the commendable speed at which decisions have been taken, it is also vital to assess the equilibrium and sustainability of each such decision within the context of the long-term development of Latvia, and the mid- and long-term impacts on the economy. The State itself must be the transformation leader. When carrying out comprehensive reforms, Latvia will become more competitive, and the process of economic recovery after the Covid-19 crisis will be more successful. It has been repeatedly emphasised that a larger budget deficit is expected which allows the opportunity for these resources to be used practically to implement the reforms needed to move the continued development of the country forward. Due to the high level of uncertainty it is important to introduce sustainable measures, considered decisions and develop a permanent action plan in order to renew and promote economic development in the long-term. FICIL formed the Covid-19 Task Force bringing together experts from various sectors to provide specific recommendations for mid- and long-term economic recovery plan.
The recommendations relate to the following areas:
- human resource;
- infrastructure (hard and soft);
The full recommendation report is available here.