Internal Devaluation To Fuel Social Upheaval

August 2009
Emerging Europe Monitor: Central Europe & Baltic States;Aug2009, Vol. 16 Issue 8, p11
Country Report
The article presents an analysis on the move of the Latvian government to choose internal devaluation as a way in restoring export competitiveness. It mentions that the effects of internal devaluation would result to social upheaval. In this regard, it initiates a package of substantial spending cuts to tighten its expansive fiscal policy. The government is cautioned that the internal devaluation that inflates the unemployment rate will lead to social instability.


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