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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 11:53

Ministry's economic growth projection for Latvia unchanged in 2014

BC, Riga, 15.08.2014.Print version
Latvia's economic growth in 2014 could reach 3.5%, according to the Economy Ministry's report on the macroeconomic situation in the country, cites LETA/Nozare.lv.

The ministry released a similar forecast in July, while at the beginning of the year, the Economy Ministry said it was expecting a 4.5% growth this year. A few days ago, the Finance Ministry said that the previous forecasts about Latvia's national economy will have to be revised and that growth this year will be significantly lower than the current projection of 4%.

 

The Economy Ministry's report indicates that this year, economic growth will be stimulated by increasing private consumption thanks to improvements on labor market. It is expected that private consumption could increase by 3.2% in 2014.

 

The necessity to sustain a healthy competitive capacity, on the other hand, will restrict a rapid increase in employment and salaries, and thus in private consumption as well. With private consumption increasing, growth in sectors oriented toward the domestic market, such as commercial services, trade and construction, will continue to steadily improve. The amount of investments will be mostly affected by businessmen's cautious mood in regard to future perspectives, as well as by banks' cautious lending policies.

 

Latvia's export opportunities will be stimulated by increasing demand in the largest export markets in the West, while export to eastern markets will depend on further developments in Ukraine and Russia's economic trends.

 

The Economy Ministry is currently reviewing Latvia's economic growth forecast for this year.

 

The Economy Ministry explained that, taking into account the situation in regard to Ukraine, as well as Russia's embargo on EU food products, the ministry has begun to look over its growth forecast.

 

The Economy Ministry emphasizes that Latvia's economic growth forecast could be reduced this year, taking into account the reduction in demand in Russia, as well as investors losing confidence in the region.

 

Latvia's growth will also slightly be affected by Russia's food embargo, the ministry added.






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