European Commission projects Latvia to see second biggest economic downslide in Baltics this year

  • 2020-05-06
  • LETA/TBT Staff

RIGA - The European Commission in its latest economic forecasts projects that Latvia's gross domestic product (GDP) this year will decline by 7 percent, showing the second steepest decline in the Baltic states.

At the same time, Latvia's GDP is expected to rise 6.4 percent next year.

Inflation has been projected at 0.2 percent this year and 1.9 percent next year.

The Commission said that due to closure of borders and external demand, investments and exports will suffer most, while domestic consumption will be better than in other countries because of softer restriction measures.

Latvia's budget deficit is planned at 7 percent of GDP this year and 4.5 percent next year.

Lithuania is projected to see a steeper economic downslide - at 7.9 percent this year, while the economic growth next year is forecast at 7.4 percent. Inflation in Lithuania is projected at 0.8 percent this year and 1.5 percent next year.

Estonia is expected to see a 6.9 percent GDP drop this year and a  5.9 percent rise next year. Inflation is forecast at 0.7 percent and 1.7 percent respectively.

The EU this year will see a 7.4 percent drop of GDP this year and is expected to see a 6.1 growth next year. Meanwhile, the euro area is projected to decline 7.7 percent in 2020 and return to a 6.3 percent growth next year. Inflation this year and next year is projected at 0.6 percent and 1.3 percent in the EU respectively, and 0.2 percent and 1.1 percent in the euro area.