According to updated projections, Latvia's economy will grow by 2.2% in 2020, accelerating to 2.8% in 2021 and 2022, and to 2.4% in 2023.
Compared to previous projections made in June 2019, GDP growth projections for 2020 have been revised down by 0.6 percentage points, but remain unchanged for 2021 and 2022.
"Latvia's economic growth slowed down to 2.1% last year, and the downward trend in the 2020 projection is also driven by the weaker external markets, less favorable developments in several key sectors of Latvia's economy, including transport and construction, and a significant increase in external risks and uncertainty," the ministry said in a statement.
With strong personal income growth and low unemployment, private consumption will be the main driver of economic growth in 2020, while investment growth will be slower than in previous years and export growth rates will remain at a moderate level of 2.5%, the ministry predicted.
"In coming years, as the situation in foreign markets improves, Latvia's economic growth will stabilize at 2.8%, which is close to the potential growth rate of the economy," it said.
Average annual inflation in 2020 is projected at 2.3%, down from 2.8% last year and it is expected that inflation will continue to fall reacing 2.0% by 2023.
Wage growth in 2020 will be slightly lower than in previous years, but will remain relatively strong, with average monthly gross wages rising by 6.0% to € 1147, the ministry believes.