RIGA - Growth is expected in all of Latvia’s main national economy sectors in 2013, but the growth pace will be slightly slower than in 2012, according to the Economy Ministry’s report on the macroeconomic situation, reports Nozare.lv.
The Economy Ministry notes that export-oriented sectors will continue to contribute greatly to growth in 2013 - especially the manufacturing industry where the average growth pace will be faster than the average growth of the national economy. Thanks to increasing domestic consumption, the volumes of trade and commercial services will increase. Slower growth is anticipated in construction and public services this year.
Given that the economic growth of Latvia will continue to greatly depend on export opportunities, global economic development will pose the greatest risk to the economic development of Latvia. The International Monetary Fund predicts faster global economic growth this year than in 2012, but at the same time growth in Europe will be not as fast and the recovery more gradual.
With weak demand on foreign markets, exports of Latvian goods and services will be moderate this year as compared to the past few years. Companies’ ability to improve their competitiveness and find new market niches will be of great importance in the development of exports. Domestic demand will continue to increase in 2013, but the increase will be moderate due to the relatively-high unemployment, household debts and banks’ cautious lending policies.
The Economy Ministry also predicts that employment in 2013 will increase 2.4 percent from 2012, and that the average unemployment rate will decrease to approximately 11 percent by the end of 2013.
The ministry believes that Latvia’s economic growth in 2013 will be slightly slower than in 2012, and gross domestic product could increase 4 percent this year.