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Flash comment: Latvia - March 9, 2012


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Flash comment: Latvia - March 9, 2012:Latvian GDP rose by 5.5% in 2011

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Flash comment: Latvia - March 9, 2012

  1. 1. Flash comment: Latvia Economic commentary by Economic Research Department March 9, 2012 Latvian GDP rose by 5.5% in 2011 Real GDP growth, % Similarly to Estonia and Lithuania, Latvia’s GDP data for the fourth 10 5 quarter of 2011 were revised upwards. According to the Latvian Quarterly, sa (rs) Central Statistical Bureau, seasonally adjusted GDP rose by 1.1% Annual, nsa in the fourth quarter of 2011 compared to the previous quarter. 0 0 Although this is higher than the 0.8% shown by the flash estimate, this is still a slowdown from the 1.5% in the third quarter. In annual terms economic growth was 5.7% in the fourth quarter -10 -5 (the flash estimate showed 5%). Investments (incl. inventories) were by 25.6% higher than a year ago, exports were up by 9.1%, household consumption by 4.1%. Government consumption growth -20 -10 remained subdued, at 0.7%. Higher domestic demand and stronger 2008 2009 2010 2011 Source: CSBL exports boosted also imports that grew by 13%. The strongest growth among industries in the fourth quarter was in Contribution to GDP growth, pp construction (26%), accommodation and food services (18.7%), 20 information and communications (9.9%), and manufacturing (9.1%). 10 0 In 2011 overall, economic growth was 5.5%, mostly driven by exports and investments. -10 -20 Outlook -30 Latvian economic growth is slowing. The risk of negative scenario -40 is shrinking gradually, at least in short term, but there are still many 1Q 08 1Q 09 1Q 10 1Q 11 problems in the euro zone that need to be solved. Therefore, the Households Government Gross fixed cap.form. Inventories main driver of Latvian economic growth – exports – is expected to Net exports GDP growth expand slower. Our GDP growth forecast remains at 2% for this Source: CSBL year. Economic sentiment and GDP growth 120 20% 15% 110 10% Lija Strašuna 5% Senior Economist 100 + 371 6 744 5875 0% -5% 90 -10% 80 -15% -20% 70 -25% 2008 2009 2010 2011 2012 ESI, points Annual GDP growth (rs) Source: CSBL, DG ECFINSwedbank Economic Research Department Flash comment is published as a service to our customers. We believe that we have used reliable sources and methods in the preparation of the analyses reported in this publication.SE-105 34 Stockholm, Sweden However, we cannot guarantee the accuracy or completeness of the report and cannot held responsible for any error or omission in the underlying material or its use. Readers encouraged to base any (investment) decisions on other material as well. Neither Swedbank nor its employees may be held responsible for losses or damages, direct orLegally responsible publisher indirect, owing to any errors or omissions in Flash comment.Cecilia Hermansson, +46 8 5859 7720