RIGA, Dec. 16 (Xinhua) -- The Bank of Latvia has cut its gross domestic product (GDP) forecast for this year and lowered the inflation forecast for 2019 and 2020, the bank's outgoing Governor Ilmars Rimsevics said at his end-of-term news conference on Monday.
The Bank of Latvia has reduced the Baltic country's GDP growth forecast for 2019 to 2.3 percent from 2.5 percent, but has left the economic growth forecast for 2020 at 2.6 percent, Rimsevics told reporters.
Earlier this year, the central bank already downgraded Latvia's economic growth forecast to 2.9 percent from 3.5 percent in June, and to 2.5 percent from 2.9 percent in September.
"With the global and eurozone economies stumbling, Latvia's growth is gradually slowing down as well. As demand from Latvia's key trade partners weakens, exports and investment will be growing at a slower pace," Rimsevics said, adding that in this situation domestic demand remains the main driver of economic growth.
Rimsevics noted that high uncertainty has been making consumers and businesses increasing cautious, which has hampered consumption and investment growth.
"Next year, too, the growth of external demand is expected to be relatively slow, which will continue to affect export performance, business investment and consumer spending," Rimsevics said.
The central bank has also cut Latvia's inflation forecast for this and next year. The annual inflation forecast for 2019 has been lowered to 2.8 percent from 2.9 percent and for 2020 to 2.4 percent from 2.5 percent.
Rimsevics is standing down as Bank of Latvia governor on Dec. 21, and Martins Kazaks, a member of the Bank of Latvia Council, is taking over as the institution's new head.
