Latviski English По-русски
Sunday 17.12.2017 | Name days: Teiksma, Hilda

SEB analysts: growth in Eurozone and rapidly growing economies will get stronger

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUEurozone’s growth this year turned out impressive. Its economic power and reduction of political risks also supports euro’s strength. Low inflation indexes remain below the goals set by central banks. Still, they continue recovering from the previously realized stimulating monetary policy, SEB Bank analysts comment on the latest Nordic Outlook.

«In spite of SEB Bank’s optimistic predictions for 2017, we have added corrections to our GDP outlook. Predictions are based on currently dominating factors. On one hand, powerful labour markets and output increase secure additional stimuli that contribute to private consumption and capital costs. On the other hand, considering low unemployment levels, focus should be put on matters associated with the weak spot – inflation dynamics and sustainable growth,» comments SEB Bank’s macroeconomic expert Dainis Gašpuitis.

He says geopolitical risks only create more concerns. «Lately a lot of attention is given to the growing tension on the Korean peninsula and the Middle East. At the same time, we see that households and businesses are sufficiently immune against political uncertainty.»

Following global trends, growth in Baltic States has also become faster. This has forced an increase of outlooks for Latvia and Estonia. Latvia’s GDP outlook if 4.5% for 2017, 3.7% for 2018, and 3.5% for 2019. Estonia’s economy is set to grow 4.1% this year, 3.3% next year and 3% the year after. Lithuania’s growth outlook is 3.7% for this year, 3.2% for next year and 3% for the year after, the economist continues.

SEB experts predict that economy in USA will slow down a bit in 2019. «Inflation continues bringing unpleasant surprises. Still, many central banks still have sufficient room for manoeuvring and searching for stimulating measures. Central banks now face a dilemma – how to balance risks: reduce formation of further imbalance or cut down unemployment to an even lower level. Inflation index often reacts to low unemployment levels with a delay. Nevertheless, global inflation forces continue becoming stronger. This makes it hard for central banks to find balance.»

Bank analysts say that economic growth in USA has recovered after a weak start this year. «Trump administration has had problems with getting Congress support for the realization of its policy. Next year, however, tax reductions may be performed to provide a stimulating effect of 0.25% on GDP. There is a known risk that Trump may leave NAFTA. It is likely, however, that the trade agreement with Canada and Mexico will be reviewed.»

SEB Predicts that growth in USA will be 2.3% in 2017 and 2.6% in 2018.

«Eurozone’s economy continues improving. GDP growth outlook for this and next year is 2.3%. Population growth in Eurozone significantly exceeds that of USA. This is why growth is so impressive per capita. The 2017 election cycle was not successful for anti-EU forces. This offers hope that new life will be put into EU integration process. Thanks to better economic conditions, those efforts may have good results,» say SEB experts.

Economists say that Britain’s economy is hampered by uncertainty about future relations with EU. Weak British pound sterling and stable international economic conditions force a review of UK’s GDP growth outlook for 2018. Trends provide for a drop from 1.5% this year to 1.1% in 2019. Tension in Britain’s political system continues increasing. Because of that, there is still a possibility of UK deciding to remain in EU, SEB Bank continues.

«Rapidly growing economic development rate has become stronger since 2015. China’s grown has been better than expected lately. Still, it is expected to slow down gradually. This autumn’s changes in the Communist party’s board have strengthened Xi Jinping’s reform authority. Society’s support increases for a slower short-term grown in exchange for reforms that reinforce long-term potential. The slow-down in India occurred sooner than expected. Still, economic growth in this country will start anew next year. Reform efforts will be postponed until 2019 elections. Brazil has also started recovering from a deep economic crisis,» SEB analysts say.


Leave a reply

Citadele Index: businessmen are more optimistic about economic growth

After a four-year gap, optimism has been noticed in all of Latvia’s business sectors. For the third consecutive quarter Citadele Index value exceeds 50 points. Businessmen are also positive about the country’s economy and their own finances, according to the final Citadele Index study for 2017.

Bank of Latvia increases GDP growth outlook to 4.7% for 2017

Bank of Latvia has decided in increase gross domestic product growth outlook from 4.2% to 4.7% for 2017, as reported by the bank’s governor Ilmārs Rimšēvičs.

Latvian residents’ opinion of government’s work remains negative

Latvian residents voiced the biggest degree of dissatisfaction about the development of the situation in Latvia and the work performed by the government. Although the previous evaluation of government’s work had increased by four points, it has since declined by two points, according to data from Baltic International Bank’s Latvian Barometer.

Eel fishing to be restricted in Baltic Sea for three months

European Union Fisheries Council has decided to restrict eel fishing for three months in 2018 in all waters, including the Baltic Sea. Although the World Wide Fund for Nature and environmental organization in Europe view it as a notable first step, these efforts are unlikely to have a major impact on the most important problem – eel population continues declining rapidly, as noted by WWF.

LCCI: increase of electricity bills for thousands of companies in unacceptable

Latvian Chamber of Commerce and Industry (LCCI) categorically opposes increasing electricity bills for the majority of small and medium-sized companies due to mandatory procurement component’s differentiation. The organization believes that this would basically introduce a new additional tax, making them even less competitive.

Head of Latvian Association of Regions to spend Christmas thinking on remaining in the party

Dissatisfied with multiple decisions made by Latvian Association of Regions (LAR), Riga City Council member Mārtiņš Bondars will spend the holiday thinking about his place in this political party, as he mentioned in his interview to Rīta panorama or LTV.

Estonian fund permitted to purchase several Latvia energy production companies

Latvian Competition Council has permitted Estonian fund to purchase several energy production and agricultural companies.

Meat processing giant sees room for growth in ready-to-eat foods

Consumption in the meat market segment of ready-to-eat foods is growing quickly, evaluated Finnish meat processing group HKScan that is planning to invest eight million euros in its factory in Estonia.

To fight for national minority schools, Russian representatives promise to hold a referendum

Defenders of Russian schools in Latvia promise to organize a referendum for autonomy of national minority schools, said co-chairman of Latvian Russians Association Miroslavs Mitrofanovs in regards to the transition to education only in Latvian language.

Tax payment process from capital growth to change in Latvia

As part of the tax reform, changes will be added to the Personal Income Tax Law starting from 1 January 2018. One of the changes is associated with payment and declaration of income from capital growth. The tax rate and the term for submission of declarations on income from capital growth will change next year.

Tusk deems EU migrant quotas ineffective as some states oppose taking in migrants

Donald Tusk, the head of the Council of the European Union and chairman of this week's EU summit, has evaluated that mandatory EU-wide quotas are ineffective and that there is a split between east and west as regards asylum policy.

Riga City Council’s 2018 budget – poorly planned or well-developed?

As the vote for the 2018 budget of Riga City Council draws near, representatives of all opposition parties say they will not support it as long as politicians of the ruling coalition continue viewing the city’s most important financial document as good and aimed at development.

Euro area economy has grown quicker than expected, European Central Bank estimated

Growth has been at a faster pace in the eurozone prompting the European Central Bank to raise its economic growth forecasts.

Weekends in Latvia expected to be snowy

A layer of snow will form in Latvia’s central and western regions that will remain until the middle of next week, as reported by State Environment, Geology and Meteorology Centre.

Opinion: Latvia at risk of restricting healthcare to 300,000 people

Kustība Par! political party has sent a letter to Latvia’s President Raimonds Vējonis, asking him to return to the Saeima the recently approved law on healthcare funding legislative draft. According to the party, the law restricts healthcare for 300,000 people in Latvia.

Lithuania’s 2018 budget focuses on spending cuts, NATO commitment and social security

Lithuania's 2018 budget, approved this week by the Seimas, Lithuanian Parliament, makes history for being the first budget ever with fewer spending for the governmental sector, the commitment to NATO of earmarking 2 per cent of the gross domestic product to defence and bigger allotments for social security. The budget was adopted by 84 MPs, 29 voted against, with 15 abstentions.

EU member states have to strengthen measures against sexual abuse of children

Member states of the European Union have to take more serious measures and cooperate more intensely with Europol and information technology industry to better combat sexual abuse of children, as noted by members of the European Parliament.

Latvian parliament views initiative for changing VAT rate for food product

On Thursday, 14 December, Latvia’s Saeima made its decision on the collective application that proposes reducing VAT on everyday healthy food products and increasing VAT on unhealthy products.

Maxima: residents have become more conservative in their choice of products

In Q2 and Q3, a higher degree of conservatism was noticed in residents’ choice of products. The number of buyers who gladly purchase new products has declined, whereas the number of buyers who do not change anything in their purchasing habits has increased, according to results of a study performed by Maxima.

Civil processes to be sped up and simplified in Latvia

On Thursday, 14 December, Saeima supported amendments to the Civil Process Law in the final reading. Amendments propose several major changes to the process of review of civil processes to make court sessions quicker and more efficient.

State Auditor dissatisfied with parliament’s slow legislative process

Latvian State Auditor Elita Krūmiņa plans to inquire to the Saeima about the delay with the approval of the legislative draft on the expansion of authority of her institution, as she mentioned in an interview to Rīta panorama programme of LTV.

Aldaris commences exports to France, China and Netherlands

Aldaris concludes 2017 with three new export contracts, commencing exports of products to China, France and Netherlands. Until now Aldaris has exported products to eight markets, with the largest one being United Kingdom, taking up 78.71% from Aldaris export volume, as reported by the company.

Estonian budget passed with 0.25 billion-euro deficit

The Estonian Riigikogu with 55 votes against 41 has passed the country’s 2018 state budget bill planning to spend by 0.25 billion more than it is planned to earn.

AFSAL: loan requests in non-banking industry are declined in 69% of all cases

In the first six months of 2017 Alternative Financial Services Association of Latvia (AFSAL) issued a total amount of EUR 84.7 million in consumer loans. No increase is noted in this amount when compared with the same period of 2016. Increase did not exceed 0.2%, as reported by the association.

European Parliament supports changes for combating activities detailed in Panama Papers

Public registries with names of true owners of businesses, effective protection of whistle-blowers and stricter requirements for financial intermediaries are some of the proposals intended to assist with the fight against tax avoidance, as noted by members of the European Parliament.

Newest comments

When do you go shoping for Christmas gifts?

View Results

Loading ... Loading ...

Polls Archive

Category feed: Feed: