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Latvia: GDP dropped to unexpectedly low level
Fri, May 9 2008, 13:38 GMT
by Violeta Klyviene
Today the Latvian Statistics Office announced the preliminary estimates of GDP growth. Over the first quarter of 2008, economic growth was 3.6% y/y compared to the same period in 2007, well below our expectation of 4.4% y/y and consensus forecast of 5.1% y/y.
We have downgraded our growth forecast to 2.5% y/y for 2008 and 2% y/y for 2009. However, It looks that the even more pessimistic IMF scenario of a massive slowdown in the Latvian economy in the next couple of years is quite reasonable. It is notable that the Latvian export-orientated manufacturing sectors have performed very badly recently and little improvement can be expected in the coming month as the European economy slows. Furthermore, with domestic demand now slowing dramatically, we are clearly heading for some quarters of negative GDP growth.
Published on Fri, May 9 2008, 13:40 GMT
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