Analytics, Economics, GDP, Inflation, Latvia

Swedbank chief economic expert in Latvia Lija Strasuna admits that economic growth could even reach and exceed 4%, as there could be a rapid increase in consumption in the short-term. She said that such a scenario is very possible when compared to the base scenario of around 3% growth. However, she added that this is misleading feeling of comfort.

The bank's analysts that there will be a relatively weak increase in consumer prices this year – below 1%. However, in 2017, when a recovery in oil prices is predicted, inflation could reach 2%.

Swedbank believes that salaries in Latvia will continue to increase at a higher rate than inflation, which is why households will be able to spend more.

Lithuania's economic growth the next several years will be at a similar level to that of Latvia, while Estonia's growth will be slightly smaller than in Latvia.