The Bank of Latvia Monthly Newsletter reports that inflation hit a record low of 0.6% in January 2013 due to stabilizing global food and oil prices. GDP growth in the fourth quarter of 2012 exceeded expectations at 1.3% quarter-on-quarter and 5.1% year-on-year, supported by manufacturing and retail growth. Exports grew substantially in 2012, exceeding 15% year-on-year due to improved competitiveness and diversification. The Bank of Latvia forecasts GDP growth of 3.6% in 2013, with inflation averaging around 2%.
The Latvian economy grew at 5.6% in 2012, the fastest in Europe. Inflation continued declining to 0.3% in February 2013 due to reduced prices of natural gas and stable global energy prices. The current account deficit narrowed to 1.7% of GDP in 2012 due to strong export growth. In February, Latvia joined the reference group for the EU's inflation criterion, one of the prerequisites for joining the Eurozone. Inflation is expected to remain low in 2013 without upward pressures from domestic factors like producer prices or the labor market.
The Lithuanian economy grew 3.9% in the first quarter of 2012, driven by investment and household consumption. Unemployment rose temporarily to 14.5% due to seasonality and global uncertainty. While industrial production grew 6.8% in April, manufacturing growth excluding refined products slowed significantly to 1.7%. Retail trade growth also declined as consumption growth aligned with real wage growth. Unemployment is projected to decrease for the rest of the year, but remain elevated due to high participation and uncertainty.
According to a report by Swedbank's Economic Research Department:
- Estonia's GDP growth slowed to 4.5% in the fourth quarter of 2011, down from 8.5% in the previous quarter, due to a decline in export growth.
- While domestic demand continued strengthening in the fourth quarter, contributing 7.7% to overall growth, net exports were negative for the second consecutive quarter as import growth exceeded export growth.
- The report forecasts Estonia's economic growth will slow to 2.7% in 2012, supported by domestic demand, with investment growth driven by public sector projects and private sector investment expected to increase more in 2013.
Macroeconomic Developments Report. April 2013Latvijas Banka
This document provides a macroeconomic developments report for April 2013. It summarizes economic conditions in Latvia and its major trade partners. While global growth is projected to be higher in 2013 than 2012, downside risks remain from a slower euro area recovery and issues in certain countries. Latvian exports reached peaks in late 2012, improving competitiveness, though investment activity declined. Domestic demand remains buoyed by private consumption while inflation is slowing.
Lithuanian Economy - No 1, January 4, 2012Swedbank
The Lithuanian economy remained resilient in November despite weakening demand abroad. While manufacturing growth slowed, it continued to expand, and retail trade grew at its fastest pace since recovery began. Strong growth in the fourth quarter should help public finances as budget collection has lagged targets this year. However, both foreign and domestic demand are expected to slow in the coming year, easing inflation pressures.
The document provides an economic outlook for Sweden and the Baltic countries from Swedbank. It summarizes that global growth is expected to be modest in 2012 but improve slightly in 2013. In Sweden and the Baltic countries, GDP growth in 2012 will range from 0.5-3.3% and increase to 2.1-4.3% in 2013. Unemployment is forecast to remain high but fall gradually. Risks include further instability in the euro area and volatility in commodity prices.
This forecast was done in a highly volatile environment and under assumptions that may not turn out to be true. We assume most of the economic activity restrictions to be lifted by the end of the second quarter. We expect substantial damage to the economy from domestic restrictions and lower external demand. A gradual recovery is expected in the second half of 2020, but economic activity will remain lower than the pre-crisis level. We project real GDP to fall by 5.9% in 2020. Consumer inflation is forecasted to accelerate only to 7.5% yoy in December as weak demand will limit the impact of higher inflation expectations and weaker hryvnia. We used UAH 28.7 per USD as an average 2020 exchange rate in forecast calculations.
The document provides a real estate market outlook for Belgrade, Serbia in the third quarter of 2013. It summarizes trends in the office, retail, industrial, and residential markets. In the office market, vacancy rates have fallen to their lowest level since 2009 due to improved demand and limited new supply. Retail rents have stabilized after declining in previous years. Industrial and logistics development has increased, driven mainly by e-commerce. The residential market shows signs of recovery with rising prices and sales in central Belgrade.
The Latvian economy grew at 5.6% in 2012, the fastest in Europe. Inflation continued declining to 0.3% in February 2013 due to reduced prices of natural gas and stable global energy prices. The current account deficit narrowed to 1.7% of GDP in 2012 due to strong export growth. In February, Latvia joined the reference group for the EU's inflation criterion, one of the prerequisites for joining the Eurozone. Inflation is expected to remain low in 2013 without upward pressures from domestic factors like producer prices or the labor market.
The Lithuanian economy grew 3.9% in the first quarter of 2012, driven by investment and household consumption. Unemployment rose temporarily to 14.5% due to seasonality and global uncertainty. While industrial production grew 6.8% in April, manufacturing growth excluding refined products slowed significantly to 1.7%. Retail trade growth also declined as consumption growth aligned with real wage growth. Unemployment is projected to decrease for the rest of the year, but remain elevated due to high participation and uncertainty.
According to a report by Swedbank's Economic Research Department:
- Estonia's GDP growth slowed to 4.5% in the fourth quarter of 2011, down from 8.5% in the previous quarter, due to a decline in export growth.
- While domestic demand continued strengthening in the fourth quarter, contributing 7.7% to overall growth, net exports were negative for the second consecutive quarter as import growth exceeded export growth.
- The report forecasts Estonia's economic growth will slow to 2.7% in 2012, supported by domestic demand, with investment growth driven by public sector projects and private sector investment expected to increase more in 2013.
Macroeconomic Developments Report. April 2013Latvijas Banka
This document provides a macroeconomic developments report for April 2013. It summarizes economic conditions in Latvia and its major trade partners. While global growth is projected to be higher in 2013 than 2012, downside risks remain from a slower euro area recovery and issues in certain countries. Latvian exports reached peaks in late 2012, improving competitiveness, though investment activity declined. Domestic demand remains buoyed by private consumption while inflation is slowing.
Lithuanian Economy - No 1, January 4, 2012Swedbank
The Lithuanian economy remained resilient in November despite weakening demand abroad. While manufacturing growth slowed, it continued to expand, and retail trade grew at its fastest pace since recovery began. Strong growth in the fourth quarter should help public finances as budget collection has lagged targets this year. However, both foreign and domestic demand are expected to slow in the coming year, easing inflation pressures.
The document provides an economic outlook for Sweden and the Baltic countries from Swedbank. It summarizes that global growth is expected to be modest in 2012 but improve slightly in 2013. In Sweden and the Baltic countries, GDP growth in 2012 will range from 0.5-3.3% and increase to 2.1-4.3% in 2013. Unemployment is forecast to remain high but fall gradually. Risks include further instability in the euro area and volatility in commodity prices.
This forecast was done in a highly volatile environment and under assumptions that may not turn out to be true. We assume most of the economic activity restrictions to be lifted by the end of the second quarter. We expect substantial damage to the economy from domestic restrictions and lower external demand. A gradual recovery is expected in the second half of 2020, but economic activity will remain lower than the pre-crisis level. We project real GDP to fall by 5.9% in 2020. Consumer inflation is forecasted to accelerate only to 7.5% yoy in December as weak demand will limit the impact of higher inflation expectations and weaker hryvnia. We used UAH 28.7 per USD as an average 2020 exchange rate in forecast calculations.
The document provides a real estate market outlook for Belgrade, Serbia in the third quarter of 2013. It summarizes trends in the office, retail, industrial, and residential markets. In the office market, vacancy rates have fallen to their lowest level since 2009 due to improved demand and limited new supply. Retail rents have stabilized after declining in previous years. Industrial and logistics development has increased, driven mainly by e-commerce. The residential market shows signs of recovery with rising prices and sales in central Belgrade.
- Latvian consumer price inflation declined to 4% in December 2011 from 4.7% in August, and is expected to continue falling in 2012 as economic growth slows and commodity prices retreat.
- Inflation in 2011 was driven by increases in housing, alcohol, tobacco, and transport prices, but food price inflation slowed in the second half of the year as global commodity prices fell.
- The forecast for average consumer price inflation in 2012 remains at 2.4%, with inflation expected to marginally exceed 2% in early 2013 before slowing further. Fulfilling the EU's 2% inflation target is seen as realistic for Latvia.
Macroeconomic Developments Report. March 2021Latvijas Banka
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
Latvian GDP grew 5.6% year-over-year in the second quarter of 2011, driven mainly by strong growth in industry and exports. However, the analyst expects GDP growth to slow in the second half of the year due to weaker demand from Europe. While household consumption growth has been stable due to improving employment and wages, rising prices are limiting growth in purchasing power. The analyst maintains GDP growth forecasts for 2011 at 4.2% but acknowledges European economic slowdown will likely reduce Latvian export performance and investment activity in the coming quarters.
- Latvia's external trade retained moderate positive growth in the first nine months of 2014, despite political instability in neighboring countries and low external demand. Exports grew 2% while imports dropped 1.1%.
- The Latvian economy continued growing in the third quarter of 2014, with GDP up 2.2% year-on-year, driven by domestic consumption and a good tourism season boosting retail trade.
- Inflation dropped to 0.7% in October, slowed by falling fuel prices, though food prices remained impacted by Russian sanctions. Inflation is projected to be higher in 2015 due to electricity market liberalization.
Ukrainian Pharmaceutical Market Monthly - Upharmacia - Jan 2018Eirhub
The document provides an overview of the Ukrainian pharmaceutical market indicators for December 2017. Key points include:
- Pharmaceutical exports grew 6% in 2017 to $193.4 million while imports increased 10% to $1767.3 million.
- Retail sales in values grew 16.5% in 2017 to $2731 million and volumes increased 6% to 1685 million units.
- The average cost of a pharmaceutical pack was $1.47 in 2017.
The Bank of Thailand's January Inflation Report showed that while economic growth forecasts for 2010 and 2011 remained unchanged, assumptions had changed. While impacts of floods and slow trading partners had lifted, rising domestic demand and commodity prices would remain an inflation concern. The central bank expected to front-load policy rate hikes in the first half of 2011, bringing rates to 2.75% by mid-year to control inflation, holding or continuing gradual hikes depending on inflation trends.
According to a flash estimate by Latvia's Central Statistical Bureau, GDP in Latvia increased by 1% in Q2 2012 compared to the previous quarter. This maintained the pace of growth from the prior two quarters. However, annual GDP growth slowed to 5.1% in Q2 from 6.9% in Q1, though it remained the highest in the EU. Growth was supported by both exports and domestic demand, though investment growth is expected to have slowed as industry expansion moderated. Retail trade rebounded and industry showed 7% annual growth in Q2. Economic sentiment remained robust, also supporting growth. GDP growth is forecast to decelerate in the second half of 2012 due to smaller base effects and negative calendar effects.
Is the tide rising?
The euro area is turning the corner from recession to recovery. Growth is projected to strengthen to 1 percent in 2014 and 1.4 percent in 2015.
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"Macroeconomic Developments Report", October 2013Latvijas Banka
The document provides a macroeconomic developments report for October 2013. It summarizes developments in Latvia's external sector and exports in the second quarter of 2013. Key points include:
- Latvia's exports continued to grow but at a slower annual rate due to weakening demand from major trade partners. Exports of base metals declined due to a factory closure.
- Imports declined in both volume and value as production and investment activity decreased. Imports of base metals and vehicles fell the most.
- Despite challenges, Latvia increased its share of world imports according to WTO data. The report examines economic conditions in Latvia's key trade partners.
"Highlights":
* Manufacturing buoyant in May
* Exports withstand geopolitical circumstances
* Growth trends in lending stabilize
"In Focus":
* Overproduction of economists and lawyers in Latvia? Let's debunk this myth, autori: Oļegs Krasnopjorovs and Kārlis Vilerts
Latvijas Banka Monthly Newsletter December 2018Latvijas Banka
The current account ran a deficit of 1.0% of GDP in the first nine months of 2018 due to a sharp rise in goods imports from Russia and Lithuania driven by higher volumes and prices of imports. Services exports continued to post a surplus. GDP growth was rapid at 5.3% in Q3 due to strong domestic demand from growing investment and consumption. Wage growth remains solid as unemployment declines and labor demand increases.
The document summarizes the Russian banking crisis that began in 2008 and the subsequent economic crisis in 2014-2015. It provides background on the structure of the Russian banking sector and describes the effects of the global financial crisis in 2008, including a stock market decline, rising unemployment, decreased GDP and industrial production. It also outlines government anti-crisis programs and timelines of the crises, noting that the 2014-2015 crisis was driven by a reduction in oil prices, sanctions, and a devaluation of the ruble.
Consumer prices in Latvia remained unchanged in 2013 compared to 2012 due to external factors such as global oil and food prices. Inflation expectations decreased as Latvia joined the eurozone in January 2014. Money supply resumed increasing in November 2013 as deposits grew. Manufacturing output increased 2.1% in November, supported by growth in fabricated metals, wood products, and food manufacturing. The article focuses on Latvia experiencing sustainable economic growth prior to joining the eurozone, with robust GDP growth, declining unemployment, increased private consumption, and reduced emigration without creating economic imbalances. GDP growth is projected to reach 4.1% in 2014 while inflation is projected to be 1.7%.
The Russian forest industry faced many challenges in 2014 due to macroeconomic factors outside its control, including the conflict in Ukraine and sharp decline in oil prices leading to currency devaluation. This created uncertainty and decline in capital investment. In 2015, export-oriented sectors may see cautious growth while larger non-exporting players face stagnation or decline. Smaller players have entered survival mode. Official harvesting volumes grew slightly in 2014 but the sector faces challenges of low utilization rates of allowable cuts and illegal logging remaining a problem.
Latvia's economy grew robustly in 2014 despite external vulnerabilities from geopolitical tensions. Exports exceeded 1 billion euros for the first time and tourism reached record highs, helping compensate for weaker Russian demand. The labor market continued improving with unemployment declining below the Eurozone average. Inflation remained subdued at 0.9% while wages grew in line with productivity. GDP is projected to grow 2% in 2015 while inflation remains around 0.9%, demonstrating sustainable growth without imbalances.
The document discusses inflation and economic growth in Latvia. It notes that inflation in June 2013 was slightly positive (+0.2%) due mostly to base effects of unprocessed food prices, while other factors contributed to a year-on-year drop. It also mentions that grain harvests are expected to be better than last year and could benefit from lower global food prices. Meanwhile, domestic factors do not point to substantial inflation pressures, and unusually low inflation is expected for 2013 due to positive economic growth and other offsetting factors.
Looking Ahead: The Remaining Challenges for Latvia and the BalticsLatvijas Banka
Presentation by Andris Vilks, Minister of Finance, Latvia at the International Conference: "Against the Odds: Lessons from the Recovery in the Baltics" organized by the International Monetary Fund and the Bank of Latvia.
Riga, June 5, 2012
Recent Economic Developments in Latvia and Medium-term OutlookLatvijas Banka
This presentation summarises recent macroeconomic developments in Latvia and outlines a medium-term outlook for real GDP and inflation. Presentation reviews ongoing economic recovery, labour market issues and includes analyses on core factors behind the path of inflation. The main focus of the presentation is on the issue of competitiveness of the Latvian economy pointing to the costs adjustment process and productivity gains, as well as presenting export performance, market shares and current account developments. Presentation also features slides on monetary and financial market developments.
- Latvian consumer price inflation declined to 4% in December 2011 from 4.7% in August, and is expected to continue falling in 2012 as economic growth slows and commodity prices retreat.
- Inflation in 2011 was driven by increases in housing, alcohol, tobacco, and transport prices, but food price inflation slowed in the second half of the year as global commodity prices fell.
- The forecast for average consumer price inflation in 2012 remains at 2.4%, with inflation expected to marginally exceed 2% in early 2013 before slowing further. Fulfilling the EU's 2% inflation target is seen as realistic for Latvia.
Macroeconomic Developments Report. March 2021Latvijas Banka
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
Latvian GDP grew 5.6% year-over-year in the second quarter of 2011, driven mainly by strong growth in industry and exports. However, the analyst expects GDP growth to slow in the second half of the year due to weaker demand from Europe. While household consumption growth has been stable due to improving employment and wages, rising prices are limiting growth in purchasing power. The analyst maintains GDP growth forecasts for 2011 at 4.2% but acknowledges European economic slowdown will likely reduce Latvian export performance and investment activity in the coming quarters.
- Latvia's external trade retained moderate positive growth in the first nine months of 2014, despite political instability in neighboring countries and low external demand. Exports grew 2% while imports dropped 1.1%.
- The Latvian economy continued growing in the third quarter of 2014, with GDP up 2.2% year-on-year, driven by domestic consumption and a good tourism season boosting retail trade.
- Inflation dropped to 0.7% in October, slowed by falling fuel prices, though food prices remained impacted by Russian sanctions. Inflation is projected to be higher in 2015 due to electricity market liberalization.
Ukrainian Pharmaceutical Market Monthly - Upharmacia - Jan 2018Eirhub
The document provides an overview of the Ukrainian pharmaceutical market indicators for December 2017. Key points include:
- Pharmaceutical exports grew 6% in 2017 to $193.4 million while imports increased 10% to $1767.3 million.
- Retail sales in values grew 16.5% in 2017 to $2731 million and volumes increased 6% to 1685 million units.
- The average cost of a pharmaceutical pack was $1.47 in 2017.
The Bank of Thailand's January Inflation Report showed that while economic growth forecasts for 2010 and 2011 remained unchanged, assumptions had changed. While impacts of floods and slow trading partners had lifted, rising domestic demand and commodity prices would remain an inflation concern. The central bank expected to front-load policy rate hikes in the first half of 2011, bringing rates to 2.75% by mid-year to control inflation, holding or continuing gradual hikes depending on inflation trends.
According to a flash estimate by Latvia's Central Statistical Bureau, GDP in Latvia increased by 1% in Q2 2012 compared to the previous quarter. This maintained the pace of growth from the prior two quarters. However, annual GDP growth slowed to 5.1% in Q2 from 6.9% in Q1, though it remained the highest in the EU. Growth was supported by both exports and domestic demand, though investment growth is expected to have slowed as industry expansion moderated. Retail trade rebounded and industry showed 7% annual growth in Q2. Economic sentiment remained robust, also supporting growth. GDP growth is forecast to decelerate in the second half of 2012 due to smaller base effects and negative calendar effects.
Is the tide rising?
The euro area is turning the corner from recession to recovery. Growth is projected to strengthen to 1 percent in 2014 and 1.4 percent in 2015.
Download full text
"Macroeconomic Developments Report", October 2013Latvijas Banka
The document provides a macroeconomic developments report for October 2013. It summarizes developments in Latvia's external sector and exports in the second quarter of 2013. Key points include:
- Latvia's exports continued to grow but at a slower annual rate due to weakening demand from major trade partners. Exports of base metals declined due to a factory closure.
- Imports declined in both volume and value as production and investment activity decreased. Imports of base metals and vehicles fell the most.
- Despite challenges, Latvia increased its share of world imports according to WTO data. The report examines economic conditions in Latvia's key trade partners.
"Highlights":
* Manufacturing buoyant in May
* Exports withstand geopolitical circumstances
* Growth trends in lending stabilize
"In Focus":
* Overproduction of economists and lawyers in Latvia? Let's debunk this myth, autori: Oļegs Krasnopjorovs and Kārlis Vilerts
Latvijas Banka Monthly Newsletter December 2018Latvijas Banka
The current account ran a deficit of 1.0% of GDP in the first nine months of 2018 due to a sharp rise in goods imports from Russia and Lithuania driven by higher volumes and prices of imports. Services exports continued to post a surplus. GDP growth was rapid at 5.3% in Q3 due to strong domestic demand from growing investment and consumption. Wage growth remains solid as unemployment declines and labor demand increases.
The document summarizes the Russian banking crisis that began in 2008 and the subsequent economic crisis in 2014-2015. It provides background on the structure of the Russian banking sector and describes the effects of the global financial crisis in 2008, including a stock market decline, rising unemployment, decreased GDP and industrial production. It also outlines government anti-crisis programs and timelines of the crises, noting that the 2014-2015 crisis was driven by a reduction in oil prices, sanctions, and a devaluation of the ruble.
Consumer prices in Latvia remained unchanged in 2013 compared to 2012 due to external factors such as global oil and food prices. Inflation expectations decreased as Latvia joined the eurozone in January 2014. Money supply resumed increasing in November 2013 as deposits grew. Manufacturing output increased 2.1% in November, supported by growth in fabricated metals, wood products, and food manufacturing. The article focuses on Latvia experiencing sustainable economic growth prior to joining the eurozone, with robust GDP growth, declining unemployment, increased private consumption, and reduced emigration without creating economic imbalances. GDP growth is projected to reach 4.1% in 2014 while inflation is projected to be 1.7%.
The Russian forest industry faced many challenges in 2014 due to macroeconomic factors outside its control, including the conflict in Ukraine and sharp decline in oil prices leading to currency devaluation. This created uncertainty and decline in capital investment. In 2015, export-oriented sectors may see cautious growth while larger non-exporting players face stagnation or decline. Smaller players have entered survival mode. Official harvesting volumes grew slightly in 2014 but the sector faces challenges of low utilization rates of allowable cuts and illegal logging remaining a problem.
Latvia's economy grew robustly in 2014 despite external vulnerabilities from geopolitical tensions. Exports exceeded 1 billion euros for the first time and tourism reached record highs, helping compensate for weaker Russian demand. The labor market continued improving with unemployment declining below the Eurozone average. Inflation remained subdued at 0.9% while wages grew in line with productivity. GDP is projected to grow 2% in 2015 while inflation remains around 0.9%, demonstrating sustainable growth without imbalances.
The document discusses inflation and economic growth in Latvia. It notes that inflation in June 2013 was slightly positive (+0.2%) due mostly to base effects of unprocessed food prices, while other factors contributed to a year-on-year drop. It also mentions that grain harvests are expected to be better than last year and could benefit from lower global food prices. Meanwhile, domestic factors do not point to substantial inflation pressures, and unusually low inflation is expected for 2013 due to positive economic growth and other offsetting factors.
Looking Ahead: The Remaining Challenges for Latvia and the BalticsLatvijas Banka
Presentation by Andris Vilks, Minister of Finance, Latvia at the International Conference: "Against the Odds: Lessons from the Recovery in the Baltics" organized by the International Monetary Fund and the Bank of Latvia.
Riga, June 5, 2012
Recent Economic Developments in Latvia and Medium-term OutlookLatvijas Banka
This presentation summarises recent macroeconomic developments in Latvia and outlines a medium-term outlook for real GDP and inflation. Presentation reviews ongoing economic recovery, labour market issues and includes analyses on core factors behind the path of inflation. The main focus of the presentation is on the issue of competitiveness of the Latvian economy pointing to the costs adjustment process and productivity gains, as well as presenting export performance, market shares and current account developments. Presentation also features slides on monetary and financial market developments.
Against the Odds: Lessons from the Recovery in the BalticsLatvijas Banka
Presentation by Gabriele Giudice (European Commission, DG ECFIN) at International Conference: "Against the Odds: Lessons from the Recovery in the Baltics" organized by the International Monetary Fund and the Bank of Latvia.
Riga, June 5, 2012
Presentation by Dr. Xavier Sala-i-Martin, Professor of Economics, Columbia University (USA) at the Bank of Latvia conference "Economic Adjustment under Sovereign Debt Crisis: Can Experience of the Baltics Be Applied to Others?"
Riga, November 2, 2012.
1) Estonia has attracted the most foreign direct investment as a percentage of GDP from euro area countries and other Baltic states since adopting the euro.
2) Latvia and Lithuania saw large drops in FDI, mainly due to restructuring at Swedbank.
3) Adopting the euro is expected to help Latvia attract more foreign investment by increasing credibility, though responsible fiscal policy is also important.
Latvia's internal devaluation in a cross-country perspectiveLatvijas Banka
The document summarizes a presentation given by Ettore Dorrucci of the European Central Bank comparing Latvia's internal devaluation strategy following its 2008 financial crisis with similar programs in Romania, Greece, Ireland and Portugal. It shows charts examining changes over time in key economic indicators such as GDP, unemployment, debt levels, inflation and competitiveness. It finds Latvia had stronger growth and more successful reforms compared to other countries, attributed to both exogenous factors like initial conditions and endogenous policy choices that delivered frontloaded austerity and structural reforms.
The document discusses Latvia's experience during the 2008 financial crisis and recovery. It explains that Latvia chose an internal devaluation through austerity and structural reforms rather than devaluing its currency. This led to a rapid but difficult adjustment period and a "V-shaped" economic recovery. Key factors in Latvia's success included speed of implementation, ownership of reforms, commitment to change, and national solidarity. The internal adjustment approach stabilized public finances, restored competitiveness and exports, attracted foreign investment, and put Latvia in a strong position to adopt the Euro in 2014.
Presentation by Gabriele Giudice (European Commission, DG ECFIN) at Country workshop: "EU Balance-of-Payments assistance for Latvia: Foundations of Success" organized by the European Commission, Directorate General for Economic and Financial Affairs, and the Bank of Latvia.
Brussels, March 1, 2012
Imbalances, Competitivenes and Economic AdjustmentLatvijas Banka
Presentation by Radoslav Krastev, Francesco Di Comite, Gabriele Giudice, Daniel Monteiro at Country workshop: "EU Balance-of-Payments assistance for Latvia: Foundations of Success" organized by the European Commission, Directorate General for Economic and Financial Affairs, and the Bank of Latvia.
Brussels, March 1, 2012
In February 2013, Latvian exports grew 9.6% year-over-year, led by growth in exports of wood and electrical machinery. Exports to Germany and Russia increased the most month-over-month. While Latvian exporters remained competitive, confidence declined in eurozone countries like Germany and Estonia. However, optimism outside the eurozone and growth in key sectors indicated Latvian exports would continue growing in 2013, albeit at a lower rate than 2012 depending on external demand.
1) Inflation in Latvia remained low at 0.4% in January 2014, partly due to increases in potato and vegetable prices being lower than the previous year. External factors like oil prices also remained stable.
2) GDP in Latvia grew by 0.7% quarter-on-quarter and 3.5% year-on-year in Q4 2013. The economy is projected to grow 4.1% in 2014, driven by external markets and increasing investment.
3) Unemployment in Latvia decreased to 11.3% in Q4 2013, indicating a shift to more productivity-based growth as employment grew only 0.8% while GDP increased significantly.
Flash Comment: Lithuania - January 30, 2012Swedbank
Growth in Lithuania decelerated sharply in the fourth quarter of 2011, with GDP contracting 0.9% compared to the previous quarter. Industrial production fell 0.8% over the same period last year, and investments were hurt by deteriorating confidence. However, for the full year 2011, Lithuania's economy grew 5.8% as all sectors expanded. Going forward, the recession in the eurozone is expected to negatively impact Lithuania's exports and confidence, but GDP growth of 3.3% is still forecast for 2012 as household consumption and investments drive growth, supported by falling unemployment.
Consumer prices in February remained broadly unchanged with annual inflation at 0.5%. While prices for winter clothing offset rising prices for seasonal tourist services, external factors like slightly higher oil prices contributed to marginal fuel price rises. Inflation is expected to remain positive in the coming months, albeit potentially lower than previously forecast due to delays in electricity market liberalization.
Latvian GDP growth was 5.9% in the first half of 2012, slowing from previous quarters. Private household consumption growth increased due to rising employment, wages and consumer confidence. Gross fixed capital formation growth remained strong at 20.5% due to infrastructure and capacity investment, although slowing from the first quarter. Export growth slowed to 3.8% while imports growth was 3.7%, resulting in a trade surplus for two consecutive quarters. Overall GDP growth is forecast to be 4% for 2012, slowing in the second half.
The Lithuanian Economy - No 8, November 15, 2011Swedbank
- Lithuania experienced strong GDP growth of 6.6% in Q3 2011, but growth is expected to moderate as the global economy slows.
- Retail trade continued double-digit growth in September, though industrial production growth decreased from 14.6% to 6.9% in 2011.
- Growth expectations have worsened due to the ongoing eurozone debt crisis, which will negatively impact exports and business/household confidence.
Macroeconomic Developments Report. July 2013Latvijas Banka
In the first quarter of 2013, Latvia's exports of goods continued to grow faster than imports in both nominal and real terms, driven by Latvian exporters' competitiveness. However, as external demand contracted and the base effect took over, the annual growth rate of Latvian exports decelerated. Most of Latvia's major trade partners saw downward revisions to economic growth forecasts for 2013. While growth is still expected in countries like Estonia, Lithuania, and Russia, the pace is expected to slow. Contraction in the euro area and weak growth in the UK and other European countries poses risks to Latvia's export growth in the coming quarters.
New developments cast doubts on global recovery
This monthly briefing highlights that sequestration may lead to lower growth in the United States, continuing weaknesses in the European Union, China announcing a GDP target of 7.5 per cent, while India boosts budget spending.
For more information:
http://www.un.org/en/development/desa/policy/index.shtml
The document summarizes Swedbank's economic outlook for Sweden and the Baltic economies. It identifies three scenarios for the eurozone crisis, with the main scenario foreseeing short-term volatility but progress over the long run. Global growth is expected to slow to 3.1% in 2012-2013 due to recession in the eurozone and slow recovery in the US. Sweden and the Baltic countries will see weaker growth in 2012 as exports decline, but are still expected to see slight positive annual growth. The risks are weighted heavily to the downside, however, depending on actions taken in the eurozone crisis.
Relatorio Portugal 2013 by Credito Y CaucionJoão Pinto
This document provides an overview and summary of key economic indicators for Portugal. The main points are:
1) The Portuguese economy contracted sharply in 2012 as domestic demand decreased and exports growth slowed. Unemployment rose to over 15% while inflation remained above the EU average.
2) Fiscal consolidation efforts have been impressive but revenue targets were missed due to weak growth. Additional austerity measures were implemented to reduce the budget deficit.
3) Structural reforms have addressed some labor market issues but more progress is needed in product markets. Banks have bolstered capital ratios with ECB funding but credit remains tight.
- In March 2012, consumer prices in Latvia increased 0.6% compared to the previous month and 3.3% compared to a year ago, a continued deceleration in annual inflation.
- The main drivers of monthly inflation were food, transport, and clothing prices, while annual inflation was highest for housing and transport.
- Higher global oil prices are expected to increase natural gas and heating tariffs in the coming months, but inflation is still forecast to fall further in April when electricity price increases from a year ago drop out of the annual calculation. Overall inflation for the year is expected to be revised up slightly from the previous forecast of 2.4%.
Global growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. On the domestic front, inflation has continued to remain subdued. Given the downward trajectory of inflation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015.
In the current issue of Economy Matters, we analyse the growth prospects of Euro Area economies and US economy, in the section on Global Trends. In Domestic Trends, data trends in IIP, inflation, trade and monetary policy are analysed. Corporate Performance section analyses the corporate results for 1QFY16. The Sectoral Spotlight for this issue is on ‘Make in India and the Potential for Job Creation’. In Focus of the Month, the important issue of ‘Financial Inclusion’ has been covered.
First Quarter Review of Monetary Policy 2012-13Ankur Pandey
The Reserve Bank of India document provides an overview of the state of the global and domestic economies. Globally, growth is slowing down across major advanced and emerging economies. In the euro area, risks remain from the fiscal and financial stability issues. Domestically, GDP growth is decelerating while inflation remains high. Monsoon rainfall so far has been below average.
The Bank of Latvia newsletter reported that:
1) Latvia's GDP grew 1.2% in Q3 2013, making it one of the fastest growing economies in the EU. Private consumption and services were major drivers of growth.
2) Inflation remained low in October due to declining fuel and food prices, though clothing prices increased seasonally.
3) While Latvian goods exports declined 2.3% year-over-year in September due to lower agricultural exports, they have increased for two consecutive months. The European Commission forecasts improving growth in Latvia's trading partners in 2014.
Euro Area is recovering slowly, with its major member countries registering lower-than-expected growth rates in the third quarter. Major Asian economies have shown diverse growth trends in the last few quarters. We cover this in the section on Global Trends in this month’s issue of Economy Matters.
In the section on Domestic Trends, we discuss the trends emanating out of the recent releases on GDP, Current Account, IIP and Inflation data during the month of December 2013.
The Sectoral spotlight for this issue is on Electricity, which remains an important contributor to GDP growth. We evaluate the impact of the Electricity Act, 2003 on the sector’s performance.
In the Special Article, we provide a snapshot of India’s exports sector along with analyzing the important sectors in exports such as services and tourism.
According to the document:
- Serbia has recorded modest GDP growth of 0.7% in 2015, with Fitch upgrading Serbia's credit rating to B+ based on better economic growth and fiscal consolidation.
- New residential property supply reached a record low in 2014 in Belgrade, while construction activity increased in 2015 based on building permits issued.
- Mortgage activity remained flat in the first 9 months of 2015 compared to the previous year, likely impacted by cuts to public sector salaries and cancellation of subsidized loans. Overall demand has been weak especially in the lower-end and mid-market segments.
- In the second quarter of 2012, Lithuania's GDP growth slowed to 2.1% year-over-year, below expectations, with quarterly growth of 0.4%.
- The slowdown was partly due to the closure of an oil refinery for maintenance, which makes up a quarter of Lithuanian industry. Business inventory contractions also weighed on growth.
- Outlook for Lithuania depends largely on developments in the euro zone, where recent events have not been encouraging but ECB actions are expected to relieve tensions and improve confidence. The bank maintains its GDP growth forecasts of 3.3% for 2012 and 4.3% for 2013.
- Annual inflation remained slightly negative at -0.1% in May due to falling fuel and food prices. This year's average annual inflation is projected to be the lowest since the 1990s.
- GDP grew 1.4% quarter-over-quarter in Q1 2013, driven mainly by private consumption which expanded on the back of employment growth and wage increases.
- Exports of Latvian goods continued rising at 17.5% year-over-year in April despite weak external demand, demonstrating the flexibility of Latvian exporters.
Human capital as the key to economic developmentLatvijas Banka
This document discusses human capital as the key driver of economic development in Latvia. It finds that while Latvia's population and workforce are projected to decrease in the coming decades, there are still substantial internal labor reserves that could be activated, such as among the young and upper-middle aged men. Improving health outcomes and reducing excess mortality is identified as the most promising way to stop depopulation trends. Additionally, public spending on education and healthcare in Latvia has been modest and outcomes could be improved by increasing efficiency. Attracting high-skilled immigration through improved quality of life is also discussed but perceived livability in Riga does not yet lead to mass immigration.
Latvijas tautsaimniecības makroekonomiskā attīstība | Septembris 2023Latvijas Banka
Latvijas Bankas prezidenta Mārtiņa Kazāka un Monetārās politikas pārvaldes vadītāja Ulda Rutkastes prezentācija 2023. gada 29. septembrī par jaunākajām ekonomikas prognozēm.
Latvijas Bankas Finanšu pratības daļas vadītājas Aijas Brikšes prezentācija Rīgas Izglītības un informatīvi metodiskā centra seminārā skolotājiem "Drošs internets un droša digitālā finanšu pratība" 2023. gada 29. augustā.
Latvijas Bankas Makroekonomikas analīzes daļas galvenās ekonomistes Baibas Brusbārdes prezentācija seminārā "Aktualitātes ekonomikā" 2023. gada 24. augustā.
Latvijas Bankas Monetārās politikas analīzes daļas galvenās ekonomistes Anetes Kravinskas prezentācija seminārā "Aktualitātes ekonomikā" 2023. gada 24. augustā.
Latvijas Bankas Makroekonomikas analīzes daļas galvenā ekonomistes Dainas Paulas prezentācija seminārā "Aktualitātes ekonomikā" 2023. gada 24. augustā.
Latvijas Banka has revised Latvia's macroeconomic forecasts for 2023-2025. Inflation is projected to decline to 10% in 2023 and further to 2.7% in 2024 and 2.6% in 2025. GDP growth is forecast to be 0.5% in 2023, then increase to 3.7% in 2024 and 3.3% in 2025. Unemployment is projected to remain stable around 7.3-7.4% through 2025. The general government deficit is expected to decline from 4% of GDP in 2023 to around 2.7-1.5% of GDP in 2024-2025.
Latvijas tautsaimniecības makroekonomiskā attīstība | Marts 2023Latvijas Banka
Latvijas Bankas prezidenta Mārtiņa Kazāka un Monetārās politikas pārvaldes vadītāja Ulda Rutkastes prezentācija 2023. gada 31. martā par jaunākajām ekonomikas prognozēm.
Latvijas tautsaimniecības makroekonomiskā attīstība | Marts 2023
Monthly Newsletter 2/2013
1.
2. Bank of Latvia Monthly Newsletter February 2013
1. Highlights
Inflation hits record lows in January
The annual inflation in January benefited from the fa
vourable effects of stabilizing global food prices and
the developments in the prices of oil over the previous
months. As a result, inflation dropped to its lowest
level since September 2010 and reached 0.6% in year-
on-year terms.
No significant demand side pressures on inflation are
ex ected in the medium term, and the average level of
p
2013 inflation in all likelihood will be lower than last
year and will not exceed 2.0%.
gdp growth in the fourth quarter of 2012 beats expectations, again
According to the flash estimate published by the Central
Statistical Bureau (CSB), gross domestic product (GDP)
grew 1.3% in the fourth quarter of 2012 quarter-on-
quarter, and 5.1% year-on-year. Thus in 2012 overall,
GDP grew by about 5.5%.
The overall GDP growth is supported by better-than-
expected manufacturing output growth (1.8% in the
fourth quarter) as well as robust growth of retail turn
over (1.8% at the end of the year).
The confidence indicators for January and the first
quart of 2013 published by the European Commission
er
indicate that the Latvian economy will continue on its
path of growth in early 2013 as well. Moreover, in recent months, various indicators continue to improve in
the euro area as well, giving rise to hopes that the worst of the euro area debt crisis is behind.
Diversification underpins robust export growth
Despite the external slowdown, the Latvian external
trade activity grew substantially in 2012, exceeding
even the most optimistic expectations. Owing to the
im roved competitiveness achieved by Latvian busi
p
nes es, the increase in the exports of Latvian goods was
s
more rapid year-on-year (15.0%) than imports (12.7%).
For a second year running, the exports of Latvian
goods demonstrated one of the highest growth rates
in the European Union: at some point Latvia even
had the leading position among the EU27 countries in
2012. The improvement in exporter competitiveness
was underpinned by the di er ification of production
v s
and markets, a rise in produc ivity and an increase in
t
producer value added.
3. Bank of Latvia Monthly Newsletter February 2013
2. Macroeconomic Data
Reporting Data (%)
period
Gross Domestic Product (GDP)
(quarter-on-quarter growth; seasonally adjusted) 2012 Q4 1.3
11.02.2013 Gross domestic product continues with its period of growth (flash estimate)
State budget
Tax revenue (current month; year-on-year growth) 2013 I 9.3
General government expenditure (since the beginning of the year, year-on-year 2013 I 11.8
growth)
Consumer price changes
Consumer Price Index CPI (month-on-month growth) 2013 I –0.2
12-month average annual inflation (to comply with the Maastricht Criteria) 2013 I 2.0
11.02.2013 Annual inflation reaches a record low since September 2010
Foreign trade
Exports (year-on-year growth) 2012 XII 9.8
Imports (year-on-year growth) 2012 XII 3.2
11.02.2013 Latvia is among EU leaders in export growth
Balance of payments
Current account balance (ratio to GDP) 2012 Q3 –1.8
Foreign direct investment in Latvia (net flows; % of GDP) 2012 Q3 4.2
12.02.2013 A small surplus in the current account in December
Industrial output
Working day-adjusted industrial output index (year-on-year growth) 2012 XII 10.4
04.02.2013 Manufacturing ends the year on a positive note
Retail trade turnover
Retail trade turnover at constant prices (year-on-year growth) 2012 XII 12.5
30.01.2013 Positive trends in retail trade continue
Employment and unemployment
Registered unemployment (share in working age population) 2013 I 10.9
14.02.2013 Robust job creation reflects labour market recovery
Monetary indicators
Broad money M3 (year-on-year) 2013 I 3.7
20.02.2013 The dynamics of money supply at the beginning of the year sustained by
business success
Source: Treasury, Central Statistical Bureau of the Republic of Latvia, and Bank of Latvia data.
4. Bank of Latvia Monthly Newsletter February 2013
3. In Focus
Bank of Latvia's Economic Forecast
Several international organizations (e.g. IMF and OECD) have revised downwards the 2013 growth forecasts
for some leading economies. At the moment, Latvia is more than ever dependent on external market develop
ments. Nevertheless, due to the regained competitiveness, Latvia's exporters have proven capable of operating
successfully and boosting their exports even in difficult external conditions. The ability to increase the market
shares, export market diversification and steeper growth of exports to partners outside the EU have so far
helped the Latvian producers to compensate the falling demand for imports in some EU Member States.
There ore, it is possible that the Latvian export growth will continue to outpace the import growth in Latvia's
f
trade partners, thereby supporting higher economic growth than currently expected.
Analyzing the risks stemming from the domestic environment, several aspects should be mentioned. Firstly,
private consumption is expected to increase at roughly the same pace as the real wage bill. Moreover, if the
increase of the share of consumer non-durables in the overall trade composition really is a signal for a potential
im rovement in the purchasing power of a larger part of the population, consumption can be expected to con
p
tinue expanding steadily. In addition, with the conditions in the public finances sector improving, the tendency
of making precautionary savings could weaken and thereby give an additional push to the rising consumption.
On the other hand, private consumption growth could be dampened by the changing consumer sentiment.
So far, the consumer outlook on future economic development has been unusually optimistic; nevertheless,
with the confidence indicators in Latvia converging with those in other EU Member States, the growth of
consumption could decelerate.
The Bank of Latvia's overall GDP growth forecast for 2013 is 3.6%. According to this baseline scenario, the
slowdown of growth in comparison with the previous year will be determined by both deceleration of ex
ports and lower investment and private consumption growth. In 2013, the most significant deceleration of
the year-on-year growth of economic activity is expected in construction and transport sectors as well as in
some manufacturing sub-sectors (manufacture of metals and wood). Changes in the above factors may act to
increase as well as to dampen the economic growth; therefore, the GDP growth could range from 3.1% to over
4% in 2013.
As regards price developments, average annual inflation is expected to remain low in Latvia in the medium-
term mainly due to supply-side factors. The currently stabilized oil and global food prices will have a mi
tigating impact on the Latvian inflation in the course of 2013. The latest gas tariff forecast for the first half
of 2013 is also assuming lower nine-month average heating oil prices, which translates into reduced natural
gas trading prices. On the other hand, the 2012 costs are gradually passing through to the core inflation,
and both the import prices and producer prices have increased. Moreover, the upside risks to inflation will
be increasingly more affected by the demand side factors: the expected positive increase in real wages and
sustainable purchasing power could support a rise in consumption. However, considering the fact that the real
purchasing power is reflected in the demand side inflation with a lag, the effect of the demand side factors is
expected to grow in 2014.
Overall, the average inflation in 2013 is forecast at about 2%. At the beginning of the year, the inflation growth
will be lower and it could accelerate gradually in the course of the year, although it is not expected to exceed
3% also at the end of the year.