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He pointed out to the problems in the job market, where there is a workforce deficit. Kazaks said that a workforce deficit is usually observed during times when the economy is seeing rapid growth, however, previous experience shows that job market problems will most likely solve themselves during the next crisis.

According to Kazaks, the workforce deficit is forcing employers to increase salaries, and last year the average salary increase in Latvia could be at around seven%.

The economic expert pointed out to the positive effect of salary increases, as thus emigrating has slowed down. At the same time, he said that salary increases should go hand-in-hand with an increase in productivity.

''Last year businesses were successful in earning more profits to increase wages. However, there is a risk that the increase in salaries could exceed productivity,'' Kazaks said.

As reported, in January 2018, Latvia’s registered unemployment rate rose by 0.2 percentage points from December 2017 to 7%, according to information released by the State Employment Agency. At the beginning of January 2018, there were 63,121 people registered with the government agency as unemployed. By the end of the month, their number had grown by 2,015 to 65,136 people.

The lowest registered unemployment rate, 4.4%, was recorded in Riga Region where unemployment edged up 0.1 percentage points from the end of December. The highest unemployment rate, 16%, was recorded in Latvia’s southeastern province of Latgale where joblessness rose 0.2% month-on-month.

In Riga, the unemployment rate was up 0.1 percentage points to 4.1%.

At the end of January 2017, Latvian unemployment stood at 8.5%.