bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 20.08.2018 | Name days: Bernhards, Boriss
LatviaLatvia

Economists: GDP to hit 4% in 2011

FaceBook
Twitter
Draugiem
print
(+2 rating, 2 votes)

Last year’s data did not bring any major surprises, matching up with the previous forecasts. Moreover, it is expected that the economic growth will be ongoing also in 2011, when the GDP could grow even 4%, economists say.

Nordea banka senior economist Andris Strazds:

Looking at data over a longer period of time, we see that significant changes have taken place in the economic structure since 2007. The share in the total value added has declined significantly for such local market-oriented sectors as trade (from 19.8% to 16.4%), construction (from 9% to 5%) and financial intermediation (from 6.2% to 4.7% ). In three years, these sectors’ share in GDP has dropped by nearly nine percentage points. While, manufacturing (the share increased from 11.4% to 12.2%), transport and communications (from 10.2% to 12.5%), real estate, renting and other business activities (from 16.1% to 18.9%), as well as electricity, gas and water supply (from 2.5% to 4.1%) and agriculture (from 3.5% to 4.0%) have become relatively more important for the economy.

It is expected the moderate but positive trend will continue in 2011, with the economy growing about 3%. Latvia will be positively influenced by strong economic growth in the key export markets – the Nordic countries, Germany and Russia. Another important factor with positive effects will be increasing investments by at least 10 – 12%, compared to the low level in 2010. For instance, the available road sector funding in 2011 will climb about 100 million lats.

SEB banka economist Dainis Gašpuitis:

This year will see further economic development, characterized by inconsistent and fluctuating growth. The emphasis will remain on the export growth, determining the domestic consumption. Welcoming of guests will form the basis of tourism growth. Transit sector will depend on the political resourcefulness, while decisiveness will ensure long-term development. In terms of freight attraction, the competition is growing year by year. The financial sector will gradually report a increase, yet the situation will remain rather tense.

This year, major risks for growth have already emerged. They are state-implemented and not always adequately assessed budget consolidation measures, focusing on tax rise. This will flare up inflation and decrease purchasing power. The rapidly shifting changes in taxes reduce the much-needed predictability of investments in business development, as well as the job creation. Also, the interest rate climb and shocking energy resource prices could hamper the growth. Despite many external risks, the internal factors will still play a considerable role, particularly the government’s action predictability and quality consolidation measures. It is estimated this year’s GDP might hit 4%.

Swedbank senior economist Dainis Stikuts:

Private consumption is gradually recovering – in Q4 the annual growth formed 5.2%. However, it is still quite weak, as it is increasing at the expense of non-food products. During the crisis, consumption of such products was very low, now it is returning to a normal level. While food consumption is not increasing – probably because it is easier not to shop at retail chains, which, in turn, signals expanding shadow economy.

On the other hand, investments in fixed capital are not comforting as they form basis for future growth– in the Q4 of 2010 the annual decrease was 1.8%. Of course, the cold winter was not favourable for investing; however, these data suggest that Latvia’s economic potential is not rising, and the medium-term growth (and convergence to the average EU level) is likely to be rather slow. This year, GDP will keep climbing – we forecast it will grow by 4% over the year. The growth will depend on investments, which in turn will be affected by efficient EU fund acquisition. Unfortunately, last year’s fund acquisition was formal, and did not involve investments. Moreover, further tax rises and inflation will keep slowing down household consumption. Unfortunately, the consolidation measures do not promote faster economic growth.

Latvijas Krājbanka chief analyst Olga Ertuganova:

Hopefully, investment growth will be ongoing this year as well; otherwise it will barely be impossible to maintain a sharp increase in exports. Clearly, the year 2010 was exceptional, a number of economic indicators reported rapid improvements, having dropped considerably in 2008– 2009. Similarly, the kick-back effect will decline in exports as well. The economic situation in Europe remains shaky, local manufacturers start feeling qualified labour shortages, thus, export growth highly depends on additional investments in manufacturing.

Overall, the trends observed in late 2010 will prevail this year as well:  export and gradual recovery of the domestic market will continue to prop up the economic growth. Of course, several risk factors have to be considered – energy resource surcharge, rather sharp rise in prices of other goods and services, as well as the negative impact of tax burden, hindering the Latvian economic growth.

In early March, the European Central Bank’s (ECB) President made a surprising announcement that the very next month the ECB will, possibly, increase the euro base rate. It is likely that the euro rate rise will reduce Europe’s economic growth rate in 2011 significantly. Given the Latvian economy’s large dependence on exports, this time will be no exception. However, even including these factors’ impact on the GDP growth, there is great confidence the GDP will exceed 3% in 2011.


Leave a reply

  1. Piter Bull says:

    Economists always have a lot to say, but do they forecasts come true?

  2. Whoopie says:

    Who is stupid enought to beleive the so called economists are capable to predict the future.Reality is much more darker.

Week in Lithuania. Probe finds no «drastic» EU differences in prices of non-food goods

A price comparison probe by Lithuania's Justice Ministry and the State Consumer Rights Protection Authority (SCRPA) has found no «drastic» differences in the prices of non-food goods in Lithuania and other EU countries. Justice Vice Minister Irma Gudžiūnaitė said that Eurostat's figures for 2017 show that the level of footwear and clothing prices in Lithuania makes 105 per cent of the EU average. The probe was carried out by the price comparison cite pricer.lt for the Justice Ministry and SCRPA. It compared 60 different non-good items in 12 EU countries on August 7.

BNN summary of the week: SRS searches for spotless reputation; MPC talks continue

BNN offers a summary of this week’s topical news in a variety of categories: Progress; Change; Contest; Announcement; Future; Politicians.

Eurostat: Latvia had inflation rate higher than average in EU and Eurozone

In July, Latvia’s inflation rate was higher than the average in Europe and Eurozone, according to data published by Eurostat.

Presence of Latvian milk reduces, whereas presence of imported milk increases in Latvia

The proportion of milk produced in Latvia is starting to lose to imported milk, as concluded by Central Union of Latvian Dairy Farmers chairman Jānis Šolks.

Seven previously convicted candidates crossed from Saeima election lists

On Friday, 17 August, the Central Election Commission decided to cross out seven previously convicted deputy candidates. The decision regarding one more candidate has been postponed until the next meeting, as confirmed by the commission.

Aspiring prosecutors «drop out» in tests – half of contenders fail second stage of tests

Approximately half of aspiring prosecutor candidates has failed the second portion of tests for general and judicial knowledge.

Riga International Airport concludes first half-year with turnover increase of 13%

Riga International Airport concluded the first half-year of 2018 with turnover increase of 13% when compared to the same period of 2017, according to the airport’s unaudited and shortened account for the six-month period before 30 June 2018.

New tender announced for post of SRS director; first requirement – spotless reputation

Latvia’s State Chancellery has announced an open personnel selection process for the post of director of State Revenue Service. Application submission process will last until 14 September.

CEC to decide on four candidates’ possible relation to KGB

Latvia’s Central Election Commission has received results of investigations of all 13th Saeima election candidates from Interior Affairs Ministry’s Information Centre and Latvian Centre for the Documentation of the Consequences of Totalitarianism.

Concord will have to include bread distribution costs in kebab café in its pre-election expenditures

Political party Concord will have to include in its 13th Saeima pre-election campaign expenditures the money spent by one of its candidates on distributing bread to pensioners free of charge in a kebab café in Bolderāja, as reported by TV3 news.

Weekends expected to be warm and at times hot in Latvia

On Friday, 17 August, the sky will partially cloudy again in Latvia, but no major precipitation is expected. Fog may form is certain regions at night thanks to slow wind speed. Maximum air temperature is expected to be around +22° C… +26° C. Night-time air temperature will stay at +11° C… +16° C, as reported by State Environment, Geology and Meteorology Centre.

Latvia’s State Audit requests additional funding to invest in workers

State Audit has requested additional funds in next year’s budget to invest in employees, as head of the institution Elita Krūmiņa mentioned in an interview to Latvijas Radio.

Nearly half of children born in Latvia in 2017 were delivered by mothers with higher education

20,828 children were born in Latvia in 2017. Almost half of them were born to mothers having higher education. Out of the total number of newborn children mothers, 7,229 or 34.7 % had acquired upper secondary general or vocational education and 2,775 or 13.3 % had basic education or lower.

«Steel Magnolia» named Lithuania's most influential politician for fourth consecutive year

Lithuanian President Dalia Grybauskaitė, dubbed as «Steel Magnolia» by foreign press, remains the most influential politician in the country for the fourth consecutive year. In two separate polls, one by the popular ratings magazine Reitingai and the other by pollster Spinter Tyrimai, she appeared on top, being followed by Saulius Skvernelis, Prime Minister, Ramūnas Karbauskis, the leader of the ruling Lithuanian Farmers and Greens Union (LFGU), Valdas Adamkus, ex-president, and Vytautas Landsbergis, Lithuania's first post-independence leader.

Ex-director: Rundale Castle Museum should be managed with the same ideals as before

In the years to come Rundale Castle Museum should be managed with the same ideals as before, says the soon ex-director of the museum Imants Lancmanis, who intends to retire at the end of this year.

Star Rating determines the best schools in Latvia

According to the 2018 Star Rating, Riga State Gymnasium No.1 remains in the lead among Latvia’s schools. Daugavpils Russian Secondary School – Lyceum is second, and Riga State Gymnasium No.2 is third.

ABLV Bank assets worth EUR 21.052 million were recovered in July

Liquidators of ABLV Bank have recovered assets worth EUR 21.052 million in July. This includes EUR 11.602 million recovered from issued loans, EUR 7.644 million from recovered/sold securities, EUR 1,792 million from loans provided to credit institutions, and EUR 14,000 from sales of real estate and other types of property, according to the account published in Latvian Herald.

Concerns over Turkish crisis cause world stock market decline

Stock prices around the world took a massive dive on Wednesday, 15 August, as concerns over Turkish crisis’ possible influence and investors’ attempts to get rid of risky assets surfaced again.

Election commission receives word some candidates’ possible non-compliance with the law

Latvia’s Central Election Commission has received information regarding possible non-compliance of multiple deputy candidates with requirements of the Saeima Election Law, says CEC chairman Arnis Cimdars.

African swine fever found in domestic pigs in Saldus; inspectors investigate illness in Unguri

African swine fever has been found in domestic pigs in Saldus Country’s Zaņa Parish. The infection was found in four domestic pigs. It cannot be excluded that ASF may have entered SIA Druvas Unguri farm’s pig enclosure along with sawdust or cars, as reported by Food and Veterinary Service Public Relations Office manager Ilze Meistere.

Lithuania lays symbolic rail on restored Mažeiķi–Reņģe railway line

Lithuania’s Lietuvos geležinkeliai railway company’s director general Mantas Bartuška and Polish oil concern Orlen manager Daniel Obatjek laid a symbolic rail on the restored railway route connecting Orlen Lithuania owned Mažeiķi oil processing plant in Lithuania and Reņģi in Latvia this Tuesday, 14 August.

Unemployment level in Latvia down to 7.7% in Q2 2018

In Q2 2018 Latvian unemployment rate constituted 7.7 %. Compared to the previous quarter, unemployment rate fell by 0.5 percentage points, while over the year it dropped by 1.2 percentage points.

Saeima approves stricter requirements for fast loans

On Tuesday, 14 August, Saeima’s Economic Committee supported in the second reading amendments to the Consumer Rights Protection Law. The legislative draft states that total loan costs that exceed 0.07% a day from the loan amount are unacceptable and non-compliant with good practice, as reported by Saeima press-service.

Noord Natie develops a new business niche – attracts cruise ships for Ventspils

The first of the cruise ships attracted from SIA Noord Natie Ventspils Terminals will arrive at Ventspils port this week. NNVT stresses that development of cruise business as a new product will help develop tourism in the city and region, as well as provide a contribution to economic development and raise recognition of NNVT terminal and the city.

Culture Ministry announces open contest for post of director of Rundale Castle Museum

Latvia’s Culture Ministry invites contenders to apply for participation in an open contest for the post of director of Rundale Castle Museum. Contenders can submit their applications before 14 September.

Newest comments