Analytics, Baltic States – CIS, Economics, EU – Baltic States, GDP, Latvia

The ministry has also reduced its growth projection for 2016 from 3.3% to 3%.

The Finance Ministry explained to LETA that the worsening of the geo-political situation, and slow economic growth within the eurozone, were the main factors slowing down Latvia's economic growth last year.

At the same time, the ministry points out that domestic spending remains at a relatively stable level, thus lessening the negative impact of external factors.

According to the Central Statistical Bureau, Latvia's economy grew 2.4% last year, which was the lowest increase in the past four years. However, Latvia's economic growth rate in 2014 was still considerably higher than the EU average.

Finance Minister Janis Reirs (Unity) explains that the situation in the external environment remains very unstable, and that it is hard to predict Latvia's economic development at the moment. ''This will be mostly determined by factors that are not in our control,'' he said.

''The main risks are still associated with the geo-political situation in the region, as well as the threats of new mutual sanctions between the EU and Russia, the deterioration of the economic situation in Russia, as well as the devaluation of the Russian ruble. In addition to this, eurozone growth remains relatively weak,'' the finance minister points out, adding that there are also various positive factors as well.