Latvia's GDP to grow fastest in CE, Baltics this year and next

The European Bank for Reconstruction and Development (EBRD) has revised upwards its forecasts for the GDP growth in Latvia in 2017 and 2018, saying that the Latvian economy was likely to show the steepest growth in Central Europe and the Baltic region.

According to the latest EBRD forecasts, the economic growth in Latvia this year will be 4.7% or 1.6% higher than projected in May. The GDP growth in Latvia in 2018 is expected at 4.1%, up 0.9% from the May estimate.

Compared to other Baltic states, the Latvian economic growth forecasts have been raised most steeply.

The EBRD estimates of the GDP growth in Estonia are 3.7% in 2017, up 0.3% points from May, and 3.4% in 2018, up 0.7% points from the estimate in May.

The Lithuanian GDP is likely to grow 3.6% this year, up 0.7% points from the EBRD projection in May, and 3.5% next year, up 0.5%.

The EBRD said that the economic growth in Central Europe and the Baltic states will accelerate this year after the slowdown in 2016 due to a decline in investments.

Investment is picking up in all three Baltic states, supported by positive expectations regarding external demand. Private consumption will likely remain strong, underpinned by improving labor markets and recovering domestic credit, the bank said.

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