Flash comment: Latvia - October 30, 2015
Annual GDP growth at 2.5% in 3Q 2015
  • GDP annual growth slowed down slightly, to 2.5% in 3Q 2015
  • Growth was likely broad based
  • It seems that the growth in 2015 will be slightly faster than 2.1% forecasted in August

In line with our expectations, the economic growth in the third quarter of this has slightly slowed. Namely, GDP grew by 0.4% compared to previous quarter (seasonally adjusted) and by 2.5% annually (compared to 1.2% and 2.7%, respectively in the previous quarter), according to the flash estimate. 



The growth was likely broad based. Retail trade turnover grew by 4.7% in the third quarter, indicating that the household consumption was robust. It is supported by strong wage growth and overall stable consumer prices. Growth of exports though has slowed compared to the beginning of the year, but in the forthcoming months it will be supported by grain exports. Investment activity has likely continued to increase, but still rather cautiously – construction volumes have decreased, while imports of machinery and equipment continued to grow. The new lending activity has also increased, but the implementation of EU Structural Funds is still hesitating.



Outlook

It seems that the growth in 2015 overall will be slightly faster than 2.1% forecasted in August, it will be closer to the growth of the previous year (2.4%). The growth will also be fastest among the Baltic countries. At the same time, there are still many risks - political and economic processes in Russia, as well as imbalances and growth slowdown in other emerging markets, for instance China, that could slow the global growth.



For more information please contact Ms. Lija Strašuna, +371 6744 5875, lija.strasuna@swedbank.lv

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