Analytics, Baltic States – CIS, Economics, EU – Baltic States, Financial Services, Latvia

The Finance Ministry notes that the current data on Latvia's economic development only cover the first two months of the year, and they do not yet reflect the impact of the Russia-Ukraine conflict.

The Finance Ministry notes several positive trends that may have a positive effect on the economic development of Latvia – increasing economic growth in the euro area and the possibility that an investor could be found for the joint-stock metallurgical company Liepajas metalurgs, which would prompt manufacturing industry's development.

However, negative risks prevail currently: the deteriorating relations between Russia and Ukraine and the geopolitical risks they may carry, falling demand for Latvian goods in Russia due to continuing recession in the neighbor country, businessmen and customers' declining mood in Latvia, slower economic growth in the developed countries, monetary policy changes in the United States, fiscal risks in several eurozone member states, and the reducing number of economically active residents in Latvia which may affect Latvia's export amounts and competitiveness.

Latvia will nevertheless remain one of the fastest-growing European Union member states, notes the Finance Ministry.

The ministry will again revise its economic growth projections for Latvia in the summer while working on the 2015 budget bill.