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International Internet Magazine. Baltic States news & analytics Friday, 26.04.2024, 06:52

EY: Latvia's economy will grow faster in 2015

BC, Riga, 13.03.2015.Print version
Regardless of the geopolitical tensions and difficulties in regard to exports, Latvia's economy this year will grow at a much faster rate than last year, according to the latest Ernst & Young's (EY) "Eurozone Economic Forecast", cites LETA.

Latvia's economy this year will grow 2.9%, which is slightly higher than last year, when the gross domestic product increased 2.5%. EY experts forecast that Latvia's economic growth will increase 4.1% in 2016, predicting a steady growth for three consecutive years – 4.5-4.6%.


Latvia (annual percentage changes unless specified)

 

2014

2015

2016

2017

2018

2019

GDP

2,5

2,9

4,1

4,6

4,5

4,5
  • Private consumption

2,5

3,6

3,4

3,7

4,2

4,4
  • Fixed investment

3,8

5,0

5,0

5,0

5,0

5,0
  • Stockbuilding (% of GDP)

1,6

0,3

0,3

0,7

0,5

0,5
  • Government consumption

5,2

2,6

2,7

2,5

2,4

2,3
  • Exports of goods and services

2,5

3,0

4,5

5,0

5,5

5,8
  • Imports of goods and services

1,8

2,3

3,8

4,2

4,5

5,2

Consumer prices

0,6

0,9

2,4

2,4

2,4

2,4

Unemployment rate (level)

11,0

9,7

8,2

8,0

7,8

7,7

Current account balance (% of GDP)

-1,0

1,4

2,3

2,7

2,8

2,9

Government budget (% of GDP)

-1,1

-1,1

-1,1

-1,1

-1,1

-1,1

Government debt (% of GDP)

35,6

35,3

34,2

33,1

32,0

31,0

Source: Oxford Economics, EY

 

Taking into account the unstable situation on eastern markets, as well as the stalling growth in the eurozone countries, economic growth in Latvia will largely depend on domestic consumption and public expenditure, instead of export growth, which will be postponed for the next year. EY believes that household consumption this year will increase 3.6%, as opposed to 2.5% last year.


EY partner in Baltics, Guntars Krols, expressed a high opinion of Latvia's ability to find a way to preserve growth even in current conditions, which are governed by uncertainty, the Ukrainian crisis, complicated trade relations with Russia, stagnation in the eurozone, and intense debates on the issue of temporary residence permits.

 

EY indicates that the Latvian Presidency currently allows to reduce investment risks, which otherwise would have a much larger impact in wake of the Ukrainian conflict. Latvia's activities, as well as the European Commission's recent investment plan, countervails private sector's concerns about long-term investments in the Baltic region.





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