SEB ups Latvian GDP growth forecasts for 2018, 2019

The Scandinavian banking group SEB in its latest Nordic Outlook has raised the forecasts for gross domestic product (GDP) growth in Latvia this year and next year.

SEB now expects a 4.1% GDP increase in Latvia in 2018 whereas the previous forecast was 3.7% and has raised its estimate of GDP growth in 2019 from 3.5% to 3.7%.

The forecast of the average annual inflation in Latvia in 2018 has not been changed and is still 2.7% but the inflation forecast for 2019 has been increased from 2.3% to 2.5%.

SEB forecasts for the GDP growth and inflation in Lithuania have remained unchanged. Lithuania is expected to show a 3.2% GDP growth in 2018 and a 3% growth in 2019 while the average annual inflation is estimated at 2.8% in 2018 and at 2.5 percent in 2019.

At the same time, the GDP growth forecast for Estonia was raised from 3.3% to 3.5% in 2018 while the forecast for economic growth in 2019 has not changed and still is 3%. The forecast for the average annual inflation in Estonia in 2018 was adjusted upwards from 3% to 3.2% but the inflation forecast for 2019 remains the same as before or 2.5%.

"The Baltic states demonstrated stable economic growth last year that was driven by exports. This year the GDP will continue growing at a healthy pace, driven by more active consumption and favorable situation in export markets. The main problem is the tight situation in the labor market that may hamper potential growth," said Dainis Gaspuitis, an expert with SEB Banka.

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