Latvia Economic Forecast

Latvia Economic Outlook

April 30, 2018

Supported by buoyant external demand, the economy likely gained some steam in the first quarter of the year, following a notable deceleration in the fourth quarter of 2017. Growth in industrial production jumped in February after easing in January, spurred by a double-digit expansion in exports. In the first two months of the year, overseas sales soared on the back of robust demand from the EU and surging orders from CIS countries. Moreover, in the same period resilient growth in retail sales suggests consumer spending continued to increase at a solid rate. The economy’s good health was further evidenced by the strong expansion of tax revenues in the first three months of the year, despite falling slightly short of the government’s target.

Latvia Economic Growth

GDP should continue to expand robustly this year, albeit at a somewhat slower pace than in 2017. Sustained wage gains and declining unemployment should buttress consumer spending, and growth in fixed investment, although likely more moderate than last year, will remain strong on the back of rising inflows of EU funds. Fiscal prudence and solid economic activity should furthermore translate into a declining debt-to-GDP ratio and a low fiscal deficit. Downside risks stem from a possible tightening in global financing conditions. Met the why particular panelists expect GDP to increase 3.9% in 2018, down 0.1 percentage points from last month’s forecast, and 3.4% in 2019.

Latvia Economy Data

Population (million)
GDP per capita (EUR)11,20311,81112,27012,707-  
GDP (EUR bn)22.723.624.425.0-  
Economic Growth (GDP, annual variation in %)  
Consumption (annual variation in %)  
Investment (annual variation in %)-6.00.1-1.8-11.7-  
Industrial Production (annual variation in %)-0.4-  
Retail Sales (annual variation in %)  
Unemployment Rate11.911.99.99.7-  
Fiscal Balance (% of GDP)-1.0-1.6-1.30.0-  
Public Debt (% of GDP)39.011.936.511.1-  
Money (annual variation in %)8.011.813.97.4-  
Inflation Rate (CPI, annual variation in %, eop)-  
Inflation Rate (HICP, annual variation in %)  
Inflation (PPI, annual variation in %)1.50.4-0.9-2.4-  
Policy Interest Rate (%)0.250.05-  -  -  
Stock Market (annual variation in %)16.2-11.345.723.5-  
Exchange Rate (vs USD)1.381.21-  -  -  
Exchange Rate (vs USD, aop)1.331.33-  -  -  
Current Account (% of GDP)-2.7-2.0-0.81.5-  
Current Account Balance (EUR bn)-0.6-0.5-0.20.4-  
Trade Balance (EUR billion)-2.6-2.4-2.1-1.9-  
Exports (EUR billion)  
Imports (EUR billion)12.612.712.512.3-  
Exports (annual variation in %)  
Imports (annual variation in %)1.00.2-1.3-1.7-  
International Reserves (EUR)  
External Debt (% of GDP)135143142147-  

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Latvia Facts

Bond Yield0.550.0 %Jun 30
Bond Yield0.550.0 %Jun 30
Exchange Rate1.180.65 %May 21
Exchange Rate1.180.65 %May 21
Stock Market1,0370.17 %May 21
Stock Market1,0370.17 %May 21

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