Latvia Economic Outlook
October 27, 2020Following the sharpest GDP contraction since the 2009-10 global financial crisis in Q2 as a result of the Covid-19 blow, recent data hints at a recovery that is losing traction. After a slight rebound in July, industrial production slumped again in August as manufacturing output faltered. Moreover, retail sales growth waned again in the same month, which, combined with a still-elevated, despite gradually falling, unemployment rate and deeply entrenched pessimism among consumers in Q3, bodes ill for private consumption. The surge in new virus infections from mid-September onwards may come to further restrain spending heading into Q4. On a positive note, Fitch Ratings affirmed the country’s credit rating at A- and lifted its outlook from negative to stable on 9 October, citing the economy’s relative resilience to the pandemic’s shock and the government’s favorable financing conditions.
Latvia Economic GrowthThe Covid-19 outbreak and associated containment measures will pummel activity this year. Next year, however, output is expected to rebound in line with a recovery in domestic spending and external demand. That said, key risks to the outlook still abound, particularly the latest resurgence of infections, which may prompt a reinstatement of restrictions. FocusEconomics panelists project GDP to grow 4.6% in 2021, which is down 0.2 percentage points from last month’s forecasts, and 3.6% in 2022.
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Latvia Economic News
November 9, 2020
Consumer prices were unchanged over the previous month in October, following September’s 0.09% uptick.
November 3, 2020
Industrial production output dropped 2.8% in year-on-year, calendar-day adjusted terms in September, slightly softer than August’s 2.9% fall.
October 30, 2020
Economic activity tumbled for the third consecutive quarter in Q3, with GDP falling 3.1% on an annual basis according to preliminary national accounts data released by Latvia’s Statistical Institute on 30 October.
October 8, 2020
Consumer prices ticked up 0.09% in September, rebounding from August’s 0.55% drop.
October 5, 2020
Industrial production output dropped 3.0% in year-on-year, calendar-day adjusted terms in August, contrasting the 0.1% uptick logged in July. August’s decline was mainly driven by a swing to contraction of manufacturing output, while growth of the mining and quarrying sector lost significant pace.