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Central bank revises down Latvia's economic growth forecast for 2019 to 2.9 pct

Source: Xinhua| 2019-06-07 19:43:05|Editor: xuxin
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RIGA, June 7 (Xinhua) -- The Bank of Latvia has cut the Baltic country's GDP growth forecast for this year to 2.9 percent from previously projected 3.5 percent, the central bank's governor Ilmars Rimsvics said at a news conference Friday.

The head of the Latvian central bank indicated that 2018 was a very successful year for the Latvian economy, with growth driven primarily by construction and ICT, as well as the transport sector, which seized the opportunity to boost cargo turnover during reconstruction works in Russian ports.

At the same time, it became increasingly clear that the peak of the economic growth cycle was already over and growth started to gradually slow down, Rimsevics said. In the first quarter of this year, Latvia's GDP growth slowed by 0.1 percent from the previous quarter to 3.2 percent.

"These trends have prompted a revision of the economic growth forecast -- the GDP growth forecast for 2019 has been revised downwards to 2.9 percent," Rimsevics said.

The Bank of Latvia governor explained that the forecast has been downgraded because of several reasons, including a slowdown of the global economy and weakening external demand in Latvia's key markets, high external volatility, as well as weather conditions' adverse impact on the energy and agricultural sectors.

Furthermore, the external uncertainties brought about by geopolitical and economic developments have gradually started affecting investment activity in Latvia and increasing consumer cautiousness.

In 2018, Latvia's GDP grew 4.8 percent, the steepest growth in the past seven years.

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