Presentation on theme: "Latvia’s Adjustment Under a Fixed Exchange Rate Regime Mark Weisbrot Co-Director, Center for Economic and Policy Research."— Presentation transcript:
Latvia’s Adjustment Under a Fixed Exchange Rate Regime Mark Weisbrot Co-Director, Center for Economic and Policy Research
Source: IMF World Economic Outlook and Reviews. GDP Losses in Recessions
Source: IMF World Economic Outlook and Reviews. Projected GDP Real GDP is not projected to meet its pre-crisis level until 2016. Extending IMF projections further, real GDP will catch up to its 2008-projected trend in 2039.
Source: IMF International Financial Statistics. Argentina: GDP
Source: IMF International Financial Statistics. Recent Devaluations and GDP Loss Devaluation GDP Decline Date Months until Trough National Currency per US Dollar Size of Devaluation Quarters until Trough Loss in GDP Change in GDP 3 Years after Devaluation BeforeTrough ArgentinaJan-0151.03.6-72.2% 2-4.9%17.2% FinlandSep-92114.45.8-23.9% 4-2.4%6.8% GeorgiaDec-9821.52.3-36.8% 1-1.6%6.5% IcelandOct-08191.2135.3-32.6% 6-10.4%-6.3% IndonesiaJul-97122,446.613,962.5-82.5% 5-13.4%-7.9% IranMar-93267.31,635.7-95.9% 4-1.6%10.6% ItalyAug-92121,102.61,605.1-31.3% 2-1.7%6.0% MalaysiaSep-9742.74.4-37.8% 5-8.5%6.7% MexicoDec-9433.46.7-48.6% 4-8.0%5.9% South KoreaDec-9711,025.61,701.5-39.7% 2-9.1%14.0% SwedenNov-9296.28.1-22.8% 2-0.4%8.9% ThailandJul-97625.853.8-52.1% 5-14.2%-4.7% United KingdomAug-92120.50.7-23.1% 00.0%9.7% Latvia2007Q4240.490.482.1% 8-24.1%-21.3%
Note: Unemployment is measured as a percent of the active labor force. Unemployed, involuntarily part-time, and discouraged workers are measured as a percent of the active labor force plus discouraged workers. Source: Latvijas Statistika. Latvia: Unemployment