Latvia's economy to grow by 3.3 pct in 2021: central bank



Latvia's economy to grow by 3.3 pct in 2021: central bank

RIGA, March 30 (Xinhua) -- The Bank of Latvia on Tuesday predicted the country's Gross Domestic Products (GDP) will grow by 3.3 percent in 2021 and 6.5 percent in 2022.

The figure, revised from its previous prediction of 2.8 percent in 2021 and 5.5 percent in 2022, indicated a stronger economic momentum in the Baltic country while a rapid widening of budget deficit has been warned.

The improved outlook was based on supportive monetary policy, favorable lending conditions, and extensive financial assistance to crisis-hit businesses and residents, local economists said.

The forecast is also based on the assumption that Latvia's COVID-19 immunization drive will go as planned and restrictions could be loosened in the second half of the year.

The Bank of Latvia has raised the inflation forecast to 1.8 percent for 2021 and 2.2 percent for 2022, as demand resumes amid recovering global economy.

Latvia's budget deficit, which was projected to widen to 7.7 percent of GDP this year, is causing concerns, said the central bank's Governor Martins Kazaks.

"A budget deficit that is close to 8 percent is very, very large." Kazaks said, urging the government to scale down crisis support as economic growth resumes.

Latvia's economy to grow by 3.3 pct in 2021: central bank

Latvia's economy to grow by 3.3 pct in 2021: central bank

Xinhua
31st March 2021, 06:44 GMT+11

RIGA, March 30 (Xinhua) -- The Bank of Latvia on Tuesday predicted the country's Gross Domestic Products (GDP) will grow by 3.3 percent in 2021 and 6.5 percent in 2022.

The figure, revised from its previous prediction of 2.8 percent in 2021 and 5.5 percent in 2022, indicated a stronger economic momentum in the Baltic country while a rapid widening of budget deficit has been warned.

The improved outlook was based on supportive monetary policy, favorable lending conditions, and extensive financial assistance to crisis-hit businesses and residents, local economists said.

The forecast is also based on the assumption that Latvia's COVID-19 immunization drive will go as planned and restrictions could be loosened in the second half of the year.

The Bank of Latvia has raised the inflation forecast to 1.8 percent for 2021 and 2.2 percent for 2022, as demand resumes amid recovering global economy.

Latvia's budget deficit, which was projected to widen to 7.7 percent of GDP this year, is causing concerns, said the central bank's Governor Martins Kazaks.

"A budget deficit that is close to 8 percent is very, very large." Kazaks said, urging the government to scale down crisis support as economic growth resumes.