Analytics, Economics, Financial Services, GDP, Latvia

Commenting on the government's performance, Kucinskis said that his government had achieved many things. Following years of stagnation, the economy of Latvia is going through a period of rapid growth now, and the country's gross domestic product is estimated to have increased 4.5% in 2017, a new record high as compared to 2007 - last year before the crisis. However, unlike the pre-crisis period, this time macroeconomic stability is maintained in Latvia.

Experts often say that wages are growing too fast, even faster than productivity, which is largely a political problem as there are labor shortages in many industries, said Kucinskis. There may be different solutions to this problem, but they have to be supported by all coalition parties, he added.

Latvia has to achieve GDP growth of 4.5% or, better yet, 5% annually for several years in a row so that Latvia could catch up with the European Union's average level of development. That is a goal for several years at least, and it is the only way to foster repatriation and stimulate regional development, said Kucinskis.

Kucinskis thanked Saeima for supporting the tax reform, stressing there were indications that Latvia was becoming interesting for prospective investors. He also said that measures against shadow economy would continue.

Two key reforms that will remain on the government's agenda for a long time are healthcare and education reforms, said Kucinskis. "We all know that injustice and poverty are among Latvia's main problems," he said. "The objective of the healthcare and education system's reforms is to foster social justice."

In conclusion of his speech, Kucinskis reminded that Latvia was celebrating its 100th anniversary this year. "I am convinced that this is something we will all celebrate, even if our political opinions are diametrically opposed."