«A quick assessment of Latvian economy’s growth in Q2 shows it growing stably. Even though the rate is slowing, we will remain the most rapidly growing economy in the European Union,»- Economy Minister Daniels Pavluts comments the latest GDP growth estimates.
«True, not only do the growth rates, but the economy’s structure and growth forming factors bring joy. They show that our growth is still being pushed forward by export rise, continuously successful development of manufacturing industry, as well as transport and tourism industries. Growth is also being noted in other domestic market industries – construction and trade services,»- says the minister.
He adds that instability, uncertainty and, in some cases, even panic in the Eurozone, will, most likely, gradually reflect on Latvia’s growth indexes. However, currently the State economy and fiscal situation is in a much better state. Therefore, there is no reason for us to panic about things we cannot influence. «We need to keep doing our homework – work towards productivity and competitiveness,»- points that Economy Minister Daniels Pavluts.
The Economy Ministry told BNN that the situation on the job market continues to improve – salaries and overall employment gradually increases. It is expected that employment could increase by 1.5% in 2012, compared with 2011. Unemployment rates, in the other hand, are expected to drop by 2 percent points and its average annual index could be 13.8%.
From now on, Latvia’s national economy will be closely linked to the country’s export capabilities. This is why Latvia’s growth risks are related the development of global economy. However, despite even the largest weakening of the growth rates of Latvia’s national economy in the second half-year, the total GDP growth will be much more rapid than previously projected, it could also reach 5%.
The Finance Ministry, on the other hand, notes that a number of factors currently show that Latvia’s economy will no longer be able to avoid the negative influence of the crisis in the Eurozone. The most important factor is that Eurozone countries still have not found a solution to the crisis, which continues to grow. As a result, it could soon adversely affect the main partner countries of Latvia’s export.
For example: in the last several months, Germany suffered a steep worsening of the general manufacturers’ mood; Lithuania’s annual GDP increase in Q2 has decreased to 2.1%. On top of that, economy growth rates also slowed in USA and other leading economies of the world. All this creates one big uncertainty and makes all future Latvia’s development perspectives careful.