According to predictions from the Organization for Economic Co-Operation and Development, Latvia may experience the most rapid GDP growth among Baltic States in 2018-2019 – 4.5% this year and 3.6% next year. Estonia’s GDP growth is planned at 3.7% this year and 3.2% next year, whereas Lithuania’s GDP growth may reach 3.3% this year and 2.9% next year, as reported by Economy Ministry.
OECD secretary general Angel Gurria said during the presentation of OECD Economic Outlook 2018 that sustainable growth of OECD member states requires structural reforms, because monetary and fiscal policy took are starting to lose their potential. In terms of reforms, a certain degree of stagnation has been noticed in member states over the years, especially when compared to other economies, such as India, Brazil and Argentina, which continue realizing structural reforms in a consequent manner. It is expected that India and China will soon secure 50% of the global economic growth in the next two years.
This is why OECD invites member states to continue using beneficial national economic growth period to invest in education, skill-development and digital infrastructure to help increase productivity and reduce inequality, as well as reduce external debt level and form fiscal reserves.
«OECD Global Economic Outlook lets us objectively view the situation in the world and see Latvia’s spot on the map. It will help Latvia realize its economic policy more successfully. Structural reforms important for sustainable economic growth and better competitiveness have already been launched. To raise competitiveness of Latvia’s national economy, we have to continue stimulating exports and investments, productivity growth and development of the human capital,» says Latvian Economy Minister Arvils Ašeradens.
Analysing global economic development, OECD notes that both the investment level and global trade volumes are up. It is also concluded that the main reason for growth was not increased productivity growth rates but rather a supporting monetary policy and expansive fiscal policy, as well as rapid labour market growth and reduced unemployment, says the ministry.