Bank of Latvia cuts 2016 GDP growth forecast to 1%

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Latvia's economy will grow 1% this year, Bank of Latvia president Ilmārs Rimšēvičs told the press Friday in what was the fourth time of this year that the central bank has lowered its GDP growth forecast for the country.

While the GDP growth estimate for next year stays the same at 3%.

Stagnation has set in in a number of areas, with falling investment, faltering exports, and credits still weak, he said.

"Sadly the tendency for the economy to cool down and the possibility for Latvia's GDP to grow by 3.5% next year is small," said Rimšēvičs.

The 3.5% growth forecast Rimšēvičs is referring to is the estimate by the Finance Ministry that was taken into account when working out next year's budget.

While the IMF expects the country's economy to grow 1.25% percent in 2016 and pick up to some 3% in 2017.

Inflation is forecast by the Bank of Latvia to be around 0% this year, the fourth year the country has registered unusually small inflation levels according to Rimšēvičs.

Prices are to grow 1.6% in 2017, according to the bank.

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