From an economic perspective, there is nothing in Prime Minister Evika Siliņa’s (JV) proposed government “restart” plan that could provide any additional boost, said Kārlis Purgailis, Chief Economist at Citadele Bank, in an interview with the LETA news agency.
“The things that are indicated in the Prime Minister’s priorities regarding economic matters are more like routine hygiene issues rather than something extraordinary that would provide any real boost. Therefore, I don’t see how this ‘restart’ would bring anything tangible to the economy,” Purgailis said.
When asked what he would like to see in the government’s work plan, Purgailis emphasized the need for concrete on how the government plans to enhance Latvia’s competitiveness. This could include further reviewing labour taxes and improving regulatory efficiency.
He also mentioned that it would be important to see the government finally move from words to action regarding the development of the capital market, an issue that has been discussed for years but has seen little real progress.
Purgailis stressed the need for political decisions on the partial listing of large and successful state-owned companies on the stock exchange, as even the offering of shares from the airline airBaltic will not be the example that will push forward the development of the capital market.
Additionally, according to him, a concrete action plan to reduce public sector spending should be a part of the programme.
“This programme mentions reducing bureaucracy by a mystical 25%. Well, it’s unclear to me how that will be measured. If a target is set that cannot be measured, it most likely won’t be achieved. Of course, reducing bureaucracy would improve Latvia’s international competitiveness and help local businesses, but exactly what will be reduced, what are these 25% and how will they be measured? I don’t see it,” Purgailis said.
He also noted that the “restart” programme should include measures to fight the grey and black economy, which remains quite significant in Latvia. “Yes, we are changing the heads of the State Revenue Service, and there are some other activities, but it’s not clear that this is a priority and a way to improve budget revenues,” the economist added.
It was previously reported that the Prime Minister, in her government “restart,” decided to replace the Minister of Transport Kaspars Briškens (P), the Minister of Education and Science Anda Čakša (JV), and the Minister of Welfare Uldis Augulis (ZZS). Atis Švinka (P) has been appointed Minister of Transport, Dace Melbārde (JV) as Minister of Education and Science, and Reinis Uzulnieks (ZZS) as Minister of Welfare.
Siliņa also announced the government’s “boost” plan, which includes a 25% reduction in the administrative burden for citizens and businesses.
The plan also promises to introduce a “green corridor” for military production and provide greater support for families.
In terms of economic growth, the plan includes the launch of an artificial intelligence center by the second quarter of the year. Additionally, it is planned to simplify and reduce the cost of the refinancing process for legal entities, as well as to develop a regulatory framework for credit unions to ensure financing availability for entrepreneurs, especially in regions. The plan aims to achieve a 20% increase in the investments attracted by the Latvian Investment and Development Agency.