Finance Ministry also ups Latvia’s GDP growth forecast for 2019

The Latvian Finance Ministry has raised Latvia’s gross domestic product (GDP) forecast for 2019 by 0.2 percentage points to 3.2 percent, according to draft Latvia’s Stability Program for 2019-2022 prepared by the ministry.

The ministry said that Latvia’s Stability Program is one of the elements in preparation of the annual government budget bill and medium-term budget framework, therefore it includes macroeconomic forecasts for 2019, 2020, 2021 and 2022.

Considering Latvia’s economic growth in 2018, the GDP growth forecast for 2019 has been raised by 0.2 percentage points to 3.2 percent, and the forecast for 2020 is at 3 percent.

According to the Finance Ministry’s estimates, Latvia’s national economic cyclic development in 2018 has reached maximum and will be lower in the future compared to last year when the economic growth reached 4.8 percent.

The general government budget deficit in 2019 will be 0.5 percent of GDP, in 2020 it may not exceed 0.4 percent, in 2021 it is projected at 0.2 percent, and in 2022 at 0.3 percent of GDP.

In line with the present forecasts, fiscal space in 2020 is minus EUR 11.9 million, in 2021 – minus EUR 81.1 million, and it could be positive in 2022 – EUR 176.3 million.

The government is expected to decide on Latvia’s Stability Program 2019-2022 at an extraordinary meeting next Monday, April 15.

The news follows a similar move by Swedbank, which also upped Latvia's GDP forecast for this year recently

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