Latvia Economic Outlook
September 28, 2021Economic growth soared to a 14-year high in annual terms in the second quarter: Strong rebounds in both private and capital spending, as well as quicker government consumption growth, were behind the result. That said, a low base effect assisted the overall figures, as Q2 2020 saw an equally steep contraction. Turning to Q3, available data points to a potential slowdown: Retail sales rose at a notably slower pace than Q2’s average in July, which, combined with deteriorating consumer confidence in July–August, suggests weaker household consumption. In other news, on 3 September Fitch Ratings affirmed the country’s “A-” credit rating with a stable outlook, citing economic resilience and the benefits of EU membership. Lastly, on 10 September the country received EUR 237 million as the first tranche of its allocated funds under the EU’s recovery spending, boding well for activity ahead.
Latvia Economic GrowthThe economy is set to rebound this year on the back of firmer household spending and reviving external demand, before gaining further momentum in 2022: As the effects of the pandemic ease, pent-up demand is expected to drive growth. That said, recent regional tensions with neighboring Belarus and a possible reinstatement of Covid-19 restrictions pose risks to the outlook. FocusEconomics panelists project GDP to grow 3.9% in 2021 and 4.9% in 2022, which is down 0.2 percentage points from last month’s forecast.
Latvia Economy Data
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Latvia Economic News
September 22, 2021
Consumer prices rose 0.36% over the previous month in August, unchanged for the third straight month.
September 3, 2021
Industrial output grew 8.4% in year-on-year terms in July, which was above June's 7.6% increase.
August 31, 2021
The economy surged 11.1% year-on-year in the second quarter of 2021, according to detailed national accounts data released on 31 August.
August 10, 2021
Consumer prices increased 0.36% from the previous month in July, matching June's reading.
August 3, 2021
Industrial production rose 7.6% year-on-year in June, following May’s 10.6% result.