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
February 26, 2021
The economy shrank 1.5% year-on-year in the fourth quarter of 2020, according to detailed national accounts data released on 26 February.
February 10, 2021
Consumer prices rose 0.37% over the previous month in January, after remaining unchanged in December 2020.
February 3, 2021
Industrial production jumped 4.7% in year-on-year, calendar-day adjusted terms in December 2020, above November’s 3.1% rise and marking the strongest increase since August 2018.
February 1, 2021
GDP fell 1.4% on an annual basis in the last quarter of 2020, according to preliminary national accounts data released by Latvia’s Statistical Institute on 1 February.
January 12, 2021
Consumer prices were flat over the previous month in December, following November’s 0.28% decline.