Latviski English По-русски
Ceturtdiena 20.09.2018 | Name days: Marianna, Ginters, Guntra

Economists: Latvia’s GDP growth will no longer be so rapid

(No Ratings Yet)

Latvia’s GDP is growing, owing its rates mainly to processing industry, construction, transport and communication industries. However, growth rates will drop in the coming quarters of the year. Also, economic growth is mainly based on internal consumption increase. Bank economists give their projections.

Bank of Latvia economist Igor Kasyanov:

Latvia’s GDP growth has been positive and stable. It is expected that GDP growth rates will drop a bit in Q3 of 2012, but growth will remain better than in some other European countries. Risks that slow Latvia’s growth will remain throughout the year. Even though Latvian manufacturers and exporters successfully continue to diversify their product and client portfolios, it should be remembered that Europe is not the only one with economic problems. China’s economic growth is gradually slowing down, USA’s economy is nearing another debt “barrier”, and the growing oil, food and other product prices threaten industrially developed economies.

Development of the budget for 2013 will be most important in the second half of the year, especially given the coming municipal elections. We need to continue structure reforms in education, healthcare, energy and business environment. It will provide medium and long-term development of the national economy.

Latvia’s national economy is on the right path – we are growing in spite of the European and global economic problems. It is proved by 11 quarters of economic growth in a row. It proves that the decisions made in the past have been successful and that we need to continue working on new reforms to ensure stable growth in the future.

Swedbank chief economist Marting Kazaks:

Growth is slowed and previous tendencies remain. Along with unemployment rate reduction, stable attitude and slow salary growth, the desire of households to spend more also grows. Household expenses have grown by 7.2%.

Activity surrounding base capital investments is still very high, but its rates have decreased to 20.5% (39% in Q1). Investment activity is mainly turned towards increasing production output, as well as formation and restoration of companies’ infrastructure. Investment volume is still insufficient in Latvia. Quality investments in export are desperately needed for production output and infrastructure improvements; without them, Latvia’s growth will soon drop. Therefore, we need to continue to invest money!

Latvia’s economy continues to recover, but growth rates grow slower. The role of households in the economy is growing again. Even though households can afford to spend more money, they should also think about making precaution pillows.

SEB Bank economist Dainis Gaspuitis:

As a whole, the total increase has been 5.9% in the last half-year, which is very good on the background of our Baltic neighbours. Export plays a major role in Estonia’s and Lithuania’s, with that there is currently a notable export rate slowdown because of GDP changes from within. Deciding events will transpire on the export markets, in other words – in the ability to preserve current positions. Meanwhile, Eurozone is drowning in recession. The situation could become clearer in the middle of next year, even though there is no guarantee the leaders of Europe will manage to find a solution for the crisis. If the situation in Eurozone does not go out of hand, growth rates in the second half-year will become slower, but they will remain.

DNB Bank economic expert Peteris Strautins:

The change of political course will help internal consumption. No one expects the current government to suddenly begin windy money spending activities, and it is good. However, any additional budget deficit reduction measures will be insignificant on the general background of budget consolidation. Maybe there is no reason for concern, because, in any case, there is very limited chance to accurately predict such a complicated and chaotic process, especially given the fact that we are talking about Latvia.

Nordea Bank senior economist Andris Strazds:

The negative effect of the Eurozone’s debt crisis has so far been less significant than expected and even in the event of a very high drop in economic growth rates in Q2, it is still clear that Latvia’s economy will grow by more than 4% during the year. The only significant risk would be the beginning of a military conflict between Israel and Iran.


Leave a reply

  1. JPR says:

    Time will tell!

Officials asked to take responsibility for misuse of state resources

If misuse of state resources takes place, officials have to take responsibility and pay for the damages caused to the state, says Public Expenditure and Audit Committee chairman Andris Bērziņš.

May asks EU not to divide Britain, while Brussels waits for UK change of position

At a European Union summit in Austria, UK's Prime Minister Theresa May called on EU leaders leave behind "unacceptable" Brexit demands that according to her may rip Britain apart.

Saeima decides to divide EUR 8.3 million of healthcare budget funds to finance reforms

Saeima’s Budget and Finance Committee has supported the initiative to divide EUR 8.277 million from the planned chronic patient care funding to further finance reforms in the country’s healthcare system.

20 complaints received in first 10 days of data protection regulation

In the first 100 days since adoption of European General Data Protection Regulation, Latvia’s Data State Inspectorate has received 20 data protection violation reports, said the centre’s director Daiga Avdejanova during a meeting of Saeima’s European Affairs Committee.

Ministry: non-banking lenders should assess clients’ solvency more carefully

Although certain improvements have been noticed in the industry, Latvia’s Economy Ministry invites amendments to make non-banking lenders perform more careful evaluation of clients’ solvency and allow creditors exchange information with one another.

Saeima argues over request to assess attempts to cancel «morality amendments»

During a meeting of Saeima’s Inquiry Committee, certain members and NGO representatives exchanged harsh words on Saeima opposition deputies’ request to Prime Minister Māris Kučinskis on association Papardes zieds’ protection of interests for the cancellation of so-called morality amendments.

EU residents believe European authorities should be more involved in certain areas

According to results of European Parliament’s Eurobarometer study, published eight weeks prior to elections in EU, residents believe European authorities should be more involved in certain matters. Priorities include terrorism threats, unemployment and environmental protection.

Estonian internet user growth strongest among elderly

The share of internet users in Estonia has continued to grow in 2018 and has over the past three months increased the most among 65–74-year-olds, official statistics show.

Regulator invited to assess calculation of electricity transmission tariff

Conclusions made by State Audit in relation to tariffs employed by Sadales tīkls show that recommendations received from OECD a couple of years ago in relation to public service tariff calculation should be carefully considered and adopted to ensure balance the interests of consumers and service providers.

Latvian police points towards stagnation in road traffic safety

So far this year 91 people have died in road traffic accidents in Latvia. According to State Police Road Traffic Safety Office Chief Normunds Krapsis, stagnation is present for road traffic safety.

Latvian government to attract EUR 29.5 million to restore Latgale’s degraded territories

On Tuesday, 18 September, Latvia’s Cabinet of Ministers supported the action plan for Latgale region’s economic growth 2018-2021, which provides for attracting of EUR 29.5 million to help restore the region’s degraded territories.

China announces retaliatory tariffs on U.S. goods, seeks free trade support

Beijing has stated it would impose a duty tariff increase on American imports worth 60 billion U.S. dollars in a reaction to Washington's announcement to add tariffs on imports from China worth 200 billion U.S. dollars.

Montenegro to join NATO battalion stationed in Latvia

According to NATO Deputy Supreme Allied Commander in Europe James Everard, Montenegro plans to join the multi-national battalion currently stationed in Latvia.

U.S. looking seriously at Poland's request for American base on its soil

U.S President Donald Trump has noted the country was looking seriously at a request from Poland for a permanent U.S. military base in the fellow NATO member state and agreed that Polish concerns about possible Russian aggression were shared.

Russian plane near Syria shot down by ally targeting Israeli planes

The Russian military plane, which went missing on Monday, has been shot down by its ally Syria targeting Israel's war planes and the number of servicemen lost in the event has been corrected from 14 to 15, the Russian government stated.

Latvian border guards find more than 140 kg of hashish in a car

On 16 September, Latvian State Border Guard detained a 1991-born man and his car at Grebnev border checkpoint. A secret compartment containing 145.3 kg of narcotic substances was found in his car during a routine inspection, as reported by State Border Guard.

EU suspects German car-makers of colluding against cleaner technology

EU competition watchdogs are probing if German automotive giants have colluded to restrict the development of clean emission technology.

Number of job vacancies in Latvia up 7.8 thousand in Q2 2018

In Q2 2018 there were 24.5 thousand job vacancies in Latvia, which is 7.8 thousand vacancies or 46.6 % more than in Q2 2017. In public sector there were 7.2 thousand and in private sector 17.3 thousand job vacancies.

Latvian government desperate to resolve the growing piles of used tires problem

Latvian government has supported Environment Protection and Regional Development Ministry’s prepared report ‘On maintenance of used tires’. This report includes proposals for measures to help resolve the matter regarding speeding up recycling and regeneration rates, as well as the no less important matter of maintenance of used tires.

Cargo volumes handled by Latvian ports remain stable in first half-year of 2018

Latvian ports transshipped 43.468 million tonnes of cargoes in the first eight months of 2018, which is 0.9% more than in the same period of last year. According to data from Transport Ministry, cargo turnover’s negative balance continues declining at Ventspils port, where 13.274 million tonnes of cargoes were transshipped in the first eight months, which is a drop of 11.9%.

airBaltic carried 18% more passengers in summer

Latvian airline airBaltic has carried 2,770,047 more passengers to destinations in Europe, Scandinavia, Russia, CIS and the Middle East in the first eight months of 2018, BNN was told by the company.

Ukrainian workers in Lithuania gradually fill gap left by Lithuanian exodus

Companies in Lithuania, in particular operating in construction, logistics and retail chains, are increasingly inviting workers from Ukraine and Belarus to fill the worker shortage of Lithuanians moving to richer countries.

ABLV Bank assets worth EUR 47.14 million recovered in August

Assets worth EUR 47.13 million were recovered from the liquidated ABLV Bank in August, which is 2.2 times more than a month prior, according to the account published in Latvian Herald.

Estonia bank watchdog points to Denmark's responsibility over Danske

As to the allegations of doubtful billions flowing via the Estonia branch of Danske Bank, the Estonian watchdog of financial institutions has noted that the Danish supervisory authority was responsible for the lender's risk control.

Liepaja City Council vice-chairman steps down

On Monday, 17 September, Liepaja City Council vice-chairman for tourism and investment affairs Ģirts Kronbergs announced his resignation.