GDP growth 3.5% this year predicts Economy Ministry

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Growth in Gross Domestic Product (GDP) will be around 3.5 percent in Latvia in 2014 according to the latest forecast released by the Economics Ministry on Wednesday.

“It is expected that in 2014, Latvian exports are likely to improve slightly if there is a stable situation with Latvia's main economic trading partners. At the same time there is great uncertainty surrounding the effect of the Ukrainian crisis on the Latvian economy,” the ministry said.

“As was witnessed in 2013, a key role in the growth of domestic demand will be continued improvements in the labor market. The Economy Ministry estimates that Latvian economic growth as a whole in 2014 could reach 3.5 percent.”

Despite being below the growth figures of around 5 percent per annum Latvia has posted since it emerged from the world's deepest recession in 2009-10, the 3.5 percent mark would still be a respectable performance in a European Union that is still emerging from the crisis only sluggishly.

Medium term growth will depend on two factors: eurozone countries managing to avoid "economic stagntion" and the effectiveness of the Latvian government's plans for structural reform, the ministry said.

"In the medium term Latvian growth rates could reach 4-5% per year," the report concluded.

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