Latvia will not be ready to adopt the euro until 2012, and possibly even as late as 2013, because inflation in the Baltic country remains stubbornly high, Prime Minister Aigars Kalvitis said Friday.

"It will be no sooner than 2012 or 2013," Kalvitis told AFP after a meeting with foreign investors.

Two months ago, Finance Minister Oskars Spurdzins had said Latvia was unlikely to introduce the single currency euro before 2011, although he also said that the switch might not take place until 2013.

Latvia had planned to adopt the euro in 2008, but surging inflation put paid to its hopes of meeting European Union criteria for doing so.

"Slowing down inflation is the main prerequisite for joining the eurozone," Kalvitis said.

"Inflation is the only impediment to our joining the eurozone," he added.

The economy of Latvia is growing at breakneck speed as it rapidly catches up with older members of the EU, which it joined in 2004, making it difficult for the country to keep inflation down.

Latvia's gross domestic product (GDP) grew by 11.9 percent last year, the fastest rate since independence from the Soviet Union in 1991 and the strongest growth rate in the then 25-member EU.

Latvia's 12-month inflation rate hit 8.9 percent in April, one of the highest rates in the now 27-member EU.

Neighbouring Lithuania and Estonia have also shelved their targets because of inflation.

Thirteen EU countries have so far adopted the euro, while Cyprus and Malta have received a green light for their membership target of 2008.

EU-set criteria for adopting the euro say that inflation in would-be eurozone member states must not exceed the average of the three lowest rates in the EU, plus 1.5 percent.

The inflation average for the entire EU in March was lower than 3.0 percent.

Kalvitis declined to give a forecast for inflation rates for the rest of 2007.

The Latvian government has unveiled a plan for cutting inflation to 2.0-3.0 percent by 2010-11.

The package proposes placing restrictions on the issuance of personal loans and mortgages to curb consumer spending, taxing some property deals, and limiting public sector salary increases.

"Domestic consumption must be dampened down," Kalvitis said.

Two weeks ago, ratings agency Standard and Poor's questioned whether the Latvian government's anti-inflation plan went far enough, saying it was "unlikely to have a sufficient dampening effect on domestic demand."

Guenter Dunkel, of the Foreign Investors' Council in Latvia, said his organisation shared concerns about overheating.

"Latvia is still a very attractive country to invest," said Dunkel, who is a deputy chairman of the German group Norddeutsche Landesbank-Girozentrale.

"But we must realise that the party is over. We have to work and discipline ourselves so that we have the next party.

"We support the government's inflation-combating plan as the first step," he said.