Latvia’s economy is in anxious expectations – the purchasing power of people is already decreasing and the rate of economic growth is slowing down. In addition, growth in consumption is far ahead of income, said economist Martins Abolins of Citadele, reports Telegram channel Baltnews.
Despite the fact that now the situation is “still good”, according to Abolins, the autumn and winter months will be difficult for retailers, and by the end of the year consumption may decrease sharply. All this is layered on top of the worst consumer sentiment since the start of the pandemic and slow growth in average wages – just 6.9% in the first quarter of this year.
According to Abolins, decrease in purchasing power of Latvians is partly compensated by savings accumulated during the pandemic. The impact of inflation is yet to be fully felt, however. The economist predicts that the main problems will start when Latvian residents receive new heating bills, which in turn will affect trade and the economy as a whole.
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