Latvia’s inflation reaches a record
Latvia’s inflation is still the highest among 27 European countries – a whooping 9.5 per cent in July. The government launched its anti-inflation plan earlier this year with forcing banks to verify people’s income when they apply for mortgage. The number of mortgages decreased.
The next step for the government will come in the fall when it will have to follow through the second point of its anti-inflation measure: creating a balanced budget.
It’ll be tough as the capital city finishes up the bridge across the Daugava river at an estimated cost of 100 million lats ($200 million), and plans to construct a national library unfold. All the while we continue to support tons of welfare and a very large government.
I’m not against welfare by any means.
But when you hear that people have been on unemployment for nine months, you begin to dislike the welfare system. When you hear the government doesn’t invest in research and development, you become outraged. When you learn that the money a business will lose money by reinvesting it, you pull your hair out.
I also think the government, with all its ministries, commissions, boards, agencies, can be consolidated, losing some staff and developing some efficiency. Doing more but requiring less money.
At the same time, teachers demand a pay increase. They need money. Postal workers demand a pay increase. They need money.
Regardless of the highest inflation in 10 years, the government of Aigars Kalvitis insists the plan is working. We just have to wait, Kalvitis says.
And the pessimistic public expects the worst: higher inflation and, God forbid, devaluation.
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