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Latvia's high inflation tests the ruling coalition
Real estate news By Digitel Journal Staff
Oct 8, 2007
Latvia's annual inflation reached a 10-year record of 11.4 per cent in September, the national statistics office said on Monday, putting further pressure on the centre-right government. The figure - the European Union's second highest behind Bulgaria - rose from 10.1 percent in August. Last time it was this high came in January 1997, Oskars Alksnis told Deutsche Presse-Agentur, dpa.
Earlier on Monday, the government accepted the 2008 annual budget which foresees a surplus of 1 per cent of the gross domestic product (GDP) in an effort to tame the rising inflation. The centre-right government led by Prime Minister Aigars Kalvitis has been under pressure domestically and internationally to heed the signs of an overheated economy.
Domestically, the government faced pressure to increase wages of doctors and teachers who have demanded pay raises beyond the level of inflation. Unwilling to accept the proposed salary freeze, doctors, teachers, and police officers' unions have threatened to begin a signature drive to dissolve the parliament if their demands are not met.
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