Analytics, Financial Services, Transport

As reported, Latvia's gross domestic product increased 3.6% in the first quarter of the year 2008, compared to the first three months of 2007, as the Central Statistical Bureau announced today. The latest GDP growth figures show a significant decrease in GDP growth pace, compared to the robust GDP growth over the past several years.

Exports must become the main factor in Latvia's economic development now, because domestic demand has dropped, the Bank of Latvia press secretary Martins Gravitis told LETA.

To ensure a sustainable growth of exports in the future, the government must consistently carry on with its measures for promoting exports.

Psychological factors also play an important role: consumers, who used to be overly optimistic, must not fall in despair, because it would inevitably affect the contribution of domestic demand to the GDP growth.

The Bank of Latvia points out that it is important to understand that there is a number of positive factors that have not changed and will continue stimulating economic growth: strong foreign investment flow, European Union funds, the money that Latvians working abroad send home, and comparatively strong growth in exports, also to the C.I.S. countries.