Uzraksts pie restorāna "Lido Vērmanītis" Elizabetes ielā. Foto: Paula Čurkste, LETA
Ever more draconian measures are taken to contain the virus and the economic fallout is increasing by the day, if not by the hour. The breakdown of supply chains is a negative supply shock to the economy while the lack of access to travel, restaurants, movie theaters etc etc is a massive negative demand shock. Both shocks reduce GDP and increase unemployment and very rapidly so.
The Latvian government is reacting swiftly with targeted measures towards health care, businesses in the worst affected parts of the economy (for instance travel but the list gets longer by the day), social assistance etc. All very much needed to create a bridge between today’s calamities and a (hopefully) not too distant future where the worst from this pandemic is over or at least contained. No need to see otherwise healthy firms collapse due to relatively short-term (we hope…) trouble, however massive.
