Bank of Latvia raises GDP growth forecast to 2.3 pct in 2015

The Bank of Latvia has raised its forecast for the country's gross domestic product (GDP) growth in 2015 to 2.3 percent from 2 percent but lowered the forecast for 2016 to 2.7 percent from 3 percent, Baltic News Service reported.

In 2106, the Latvian economy will benefit from further lending growth and favorable financial terms in the euro area countries, falling oil prices and the related increase in real income as well as the expected wage rise, the report quoted the bank's governor Ilmars Rimsevics as saying at a press conference Friday.

Regarding the performance of the Latvian economy in the first half of this year, Rimsevics said it was satisfactory.

"The Latvian economy showed a moderate but steady growth in the first half of 2015 with GDP expanding 2 percent in the first quarter and 2.7 percent in the second quarter. From a short-term perspective, such growth rate is satisfactory," the bank governor said.

But the latest forecasts for the economic growth in the euro area call for caution as regards the medium-term prospects of the Latvian economy. Moreover, the acceleration in the second quarter of 2015 was mostly determined by the one-off factors that might no longer apply in the future, he said.

During the first six months of 2015, Latvia's seasonally unadjusted GDP grew 2.3 percent against the same period a year ago. Enditem