European Commission projects Latvian economy to grow 1.4% in 2023

RIGA - The European Commission forecasts 1.4 percent growth for the Latvian economy this year.

This is a better prognosis than the 0.1 percent growth forecast by the European Commission back in February.

According to the European Commission's spring economic forecast, the bloc's economy will grow by 1 percent this year, a slight improvement on previous forecasts, said the European Commission's Executive Vice President for Economy Valdis Dombrovskis (JV).

Dombrovskis explained that economic growth still remains slow primarily because of to the consequences of Russia's war against Ukraine.

Latvia's 1.4 percent growth forecast is slightly above the EU average and an indication that Latvia is expected to show the fastest growth rate among the Baltic states this year. A gradual decline in inflation is expected to encourage private consumption in the second half of the year, while a more active absorption of EU funding will boost investment.

By comparison, Lithuania's economy is expected to grow by 0.5 percent this year, while Estonia is likely to see a 0.4 percent recession.

Inflation in the whole of the EU and the Baltics is gradually declining, but will remain at relatively high levels this year. Inflation in all three Baltic countries is forecast in the range between 9.2 percent and 9.3 percent this year, well above the EU average of 6.7 percent.