Market Research Logo

Latvia Country Risk Report Q4 2018

Latvia Country Risk Report Q4 2018

We forecast a modest growth slowdown over the coming years with real GDP growth coming in at 4.3% in 2018, from 4.5% in 2017. This still implies considerable growth outperformance relative to the rest of the eurozone due to ongoing business environment improvements and EU fund inflows.

Rapidly rising wage growth, an external economic shock emanating from the eurozone, or a political shock damaging relations with Russia, are the main risks facing the otherwise strong growth outlook.

Following the passage of the government's tax reforms, the focus will be on its impact on the Latvian economy in 2018 in the run up to next year's general election. The coming campaign will also highlight the divide between the political leanings of ethnic Latvians and ethnic Russians with a chance for deeper integration, but also risks of polarisation.

Key Risks



The main risk on the economic front stems from the continued rise in the minimum wage rate, which threatens to undermine the country's external competi-tiveness. Additionally, an economic shock in the eurozone could undermine exports, which make up a large share of Latvia's GDP. Politically, relations with Russia will continue to dominate concerns despite tensions between NATO and Russia having cooled of late and the US's renewed commitment to the security of the Baltic states.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Stellar Growth In Latvia To Moderate After 2018
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
TABLE: EXPORTS
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: IMPORTS
Monetary Policy
Quick View: Eurozone Inflation Reaches ECB Target
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Near-Term Strength To Give Way Gradually
TABLE: FITCH SOLUTIONS EUROZONE CURRENCY FORECAST
Latvia Country Risk Q4 2018Contents10-Year Forecast
The Latvian Economy To 2027
Looking For A 'New Normal'
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Latvian Identity Politics Central To Uncertain Election
Long-Term Political Outlook
Delayed Economic Recovery Accentuates Demographic Issues
Global Macro Outlook
Fewer Negative Surprises, But Trade Risks Rising
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: LATVIA – MACROECONOMIC DATA & FORECASTS

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report