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Sunday 23.10.2016 | Name days: Daina, Dainida, Dainis

EY: Latvia will be the sixth most rapidly growing economy in Eurozone this year

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s economy is expected to grow 2.6% in 2015. Economic growth could become stronger and reach 3.8% in 2016 and 4.5% every year from 2017 to 2019, according to the latest EY Eurozone Economic Forecast.

EY experts say Eurozone’s economy will grow by 1.4% this year. Countries of the united European currency zone will benefit from low energy prices, growing demand in USA and UK and more competitive currency course.

Researchers believe entrepreneurs’ confidence about economic stability will continue growing next year.

«In the decade before 2007 Eurozone’s economy grew on average by 2.4%. From there on in a rate of 1.5%-1.7% became a norm. It is not expected to have any noteworthy benefits for European residents. Recovering lost growth rates will be the main challenge for Eurozone in the next couple of years. One of the areas that requires improvements is the business environment – only four Eurozone countries are among the 20 best countries listed in the World Bank’s Ease of Doing Business. In addition, European countries have very intense competition for investments,» – says EY partners in Baltic States Guntars Krols.

It is mentioned in the survey that one of the main reasons for economic growth in Eurozone was household consumption, which benefited from low oil prices. Household consumption in Eurozone is expected to grow 1.6% this year, which is the highest growth index since 2007.

Experts say Eurozone countries have benefited from weakened euro exchange rate by strengthening exports. Nevertheless, with stabilized currency exchange rate, the rise in demand of Eurozone partner economies will play a bigger role. EY adds that news are not universally good there – while developed economies (USA, UK and other European countries) continue demonstrating notable growth, economic growth rates traditionally become weaker in rapidly developing markets.

«In Latvia’s case, our economic objective remains the same – becoming closer to the level of European countries. Last year’s and this year’s results do not contribute much to it. Our economy lacks a fast success formula. Nevertheless, by attracting investments, reforming the education system and strengthening exports, GDP growth of 4% can become reachable,» – said Krols.


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