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

Ilmārs Rimšēvičs/flickr.com/Bank of Latvia.
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.

The central bank has upgraded the economic outlook from 3.8% to 4.1% for 2018.

Rimšēvičs notes that growth of Latvia national economy was more rapidly than expected in 2017. This was largely thanks to more powerful external demand, larger investments and private consumption. Because of that, GDP outlook has been increased from 4.2% to 4.7%.

«It should be said that stronger economic growth is expected in the future. Still, the growth rate will become slower, with more moderate growth of external demand and investments,» said Rimšēvičs, predicting that GDP growth may be 4.1% in 2018.

At the same time, Rimšēvičs emphasized that although Latvia’s economic growth continues demonstrating more rapid growth rates in addition to investment and purchasing power rise, there is also a growing lack of labour force. This outlines pressure on wages and prices, which does have a negative effect on competitiveness of Latvian businesses. Weaker competitiveness would mean the growth rate of Latvia’s national economy could become slower.


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