Analytics, Economics, GDP, Latvia, Markets and Companies

“Most probably, we will not exceed the 5% [GDP growth] mark this year, but we are likely to be in the range between 4.5 and 5%. The Latvian economy has not seen such growth for a very, very long time,” Kazaks said, adding that Latvia’s economic growth is currently very extensive, with virtually all sectors showing growth.

The Swedbank economist indicated that this growth is not yet being felt by everyone in Latvia, but the number of people feeling it is increasing. “Wages are going to rise, but businesses will also be looking to earn this money back. So, if people want higher pay have to be ready to work more productively,” Kazaks said.

The Swedbank economist also projected that the Latvian economy will continue to show strong performance also next year. “This rather strong growth will probably continue also into next year, because the global economy is in a fairly good shape at the moment and the domestic pressure, which has been accumulating in previous years, is also fueling the growth,” Kazaks said.

The negative risks that might impede Latvia’s economic growth mostly include external factors, like geopolitical risks, while domestic risks are mostly concerned with how fast and long the current growth phase will be. Kazaks emphasized the necessity to work hard during this period of strong growth in order to prepare for less favorable times.

As reported, during the third quarter of 2017, Latvia’s GDP grew by 5.8% against the same period last year, according to a flash estimate released by the Central Statistics Bureau.