RIGA, April 20 (Xinhua) -- The Stockholm-based Nordic-Baltic banking group Swedbank expects Latvia's economic growth to be the strongest in the Baltic region this year.
In its latest economic outlook released on Tuesday, Swedbank upgraded its previous 2.8 percent gross domestic product (GDP) growth forecast for Latvia and projected 3.1 percent growth for 2021 and 5.5 percent growth for 2022.
Swedbank has also changed its inflation forecast for Latvia to 1.8 percent from 1.5 percent for this year, but it kept the forecast for 2022 unchanged at three percent.
Noting that the ongoing coronavirus pandemic and the country's "extremely poorly managed" COVID-19 vaccine rollout have had a negative effect on the Latvian economy and on consumer confidence in particular, Swedbank analysts stressed that Latvia's businesses have shown remarkable adaptability to this difficult situation.
"The unemployment rate started to edge down in mid-March," the report said. "After a very strong end of 2020, the manufacturing sector, goods exports and export orders have been holding up rather well. With base effects from the fall in Russian transit cargoes fading, the drop in services exports at the start of 2021 is notably smaller than observed for most of 2020."
"Last but not least -- data from Swedbank Cards shows an upward trend in private consumption thanks to customers and businesses adapting, and some restrictions eased," the bank said, adding that wage growth in Latvia has also remained strong through 2020 and is expected to continue in 2021. Enditem