Analytics, Economics, Financial Services, GDP, Latvia, Markets and Companies
International Internet Magazine. Baltic States news & analytics
Friday, 29.03.2024, 09:05
Bank of Latvia raises GDP growth forecast for 2017 to 4.7%
The central
bank has also upped Latvia’s economic growth forecast for 2018 to 4.1% from 3.8%.
This year, Latvia has been showing faster economic
growth than expected thanks to stronger external demand, largest investments
and robust private consumption. The GDP growth forecast has therefore been
raised to 4.7% from 4.2%, Rimsevics explained.
“Strong economic growth is expected to continue, but
the growth rate will be slowing down on a more moderate growth of external
demand and investment,” the Bank of Latvia governor said, predicting a 4.1% GDP
growth for 2018.
Although Latvia’s economic growth continues to
accelerate, increasing labor shortages are being reported along with investment
growth and strengthening of purchasing power. This, in turn, means pressure on
wages and prices, which leaves a negative effect on the competitiveness of
Latvian businesses. Weaker competitiveness means that Latvia’s economic growth
rate is likely to slow in the media-term, the head of the Latvian central bank
said.
During the first nine months of 2017, Latvia’s GDP
grew by 4.7% year-on-year at constant prices.
The Bank of Latvia projects Latvia’s average annual
inflation to be 2.9% next year, Bank of Latvia Governor Ilmars Rimsevics told
journalists.
The head of the central bank also indicated that the
annual inflation forecast for this year has been left unchanged, at 2.9%. “The
oil price dynamic has been slightly higher than forecast, but the euro
currency’s rise against the US dollar compensated for this impact,” Rimsevics
explained, adding that Latvia’s annual inflation is expected to average at 2.9%
also next year.
In September, the Bank of Latvia projected Latvia’s
average annual inflation for 2018 at 2.8%.
As reported, in November, Latvian consumer prices rose
0.1% against the previous month and climbed 2.7% against November
2016. The 12-month inflation rate, meanwhile, was 2.9% in November.