1. Market Research
  2. > Latvia Business Forecast Report Q4 2014

Latvia Business Forecast Report Q4 2014

  • August 2014
  • -
  • Business Monitor International
  • -
  • 39 pages

Core Views
Latvia's economic recovery will continue into 2014 and beyond, although we emphasise that strong headline real GDP growth is largely a result of statistical base effects. We see growing scope for the government to ease up on its long-held policy of fiscal austerity going forward. We anticipate the moderation in consumer prices in Latvia to pick
up slightly in 2014. We forecast inflation to average 0.8% in 2014 and 2.5% in 2015.

Major Forecast Changes
We have downgraded our forecast for Latvia's real GDP growth to 1.9% from 3.8% previously, as the escalating trade war between the EU and Russia is adversely affecting Latvia's goods and services export prospects. We now forecast Latvia to grow by just 1.9% in 2014 and 3.4% in 2015, from a previous forecast of 3.8% for both years previously. As the 2014 budget has been predicated on real GDP growth of 4.0% in 2014 and 2015, we see considerable risks that government revenues will arrive below projections due to weaker VAT and corporate tax receipts.

Table Of Contents

Latvia Business Forecast Report Q4 2014
Executive Summary 5
Core Views...5
Major Forecast Changes.5
Key Risks To Outlook5
Chapter 1: Political Outlook.. 7
SWOT Analysis 7
BMI Political Risk Ratings.. 7
Foreign Policy . 8
Government Intervening To Counter Impact Of Russian Embargo..8
Rising tensions between Latvia and Russia support our expectations for higher defence spending over the coming years. Domestically,
the government will step up attempts to support enterprises affected by Russia's embargo on EU imports.
TABLE: Political Overview8
Long-Term Political Outlook... 9
Slower Growth And Ethnic Tensions Key Themes To 2023....9
The coming decade for Latvia will be marked by the scars of the global financial crisis of 2008/09. The country's governments will
struggle to return the economy to pre-crisis growth and will pay the political and social price for this inability to promote growth and ease
ethnic tensions.
Chapter 2: Economic Outlook.. 13
SWOT Analysis... 13
BMI Economic Risk Ratings.. 13
Economic Activity .. 14
Caught In The Crossfire14
We have downgraded our forecast for Latvia's real GDP growth to 1.9% from 3.8% previously as the escalating trade war between the
EU and Russia is adversely affecting Latvia's goods and services export prospects.
TABLE: Economic Activity14
Balance Of Payments... 16
Current Account Deficit To Widen On Russian Embargo16
The growing trade war between Russia and the EU will cause Latvia's current account deficit to widen in 2014, and we have revised our
current account deficit forecasts accordingly.
TABLE: Current Account.16
Fiscal Policy... 18
Fiscal Slippage Expected Due To Growth Downgrades...18
On the back of our growth forecast downgrades due to the escalating trade war between Russia and the EU, we now expect a widening
of the fiscal deficit in 2014 and 2015. This deficit widening will be driven by lower than expected government receipts.
TABLE: Fiscal Policy18
Chapter 3: 10-Year Forecast 21
The Latvian Economy To 2023... 21
Looking For A 'New Normal'...21
After three years of growth outperformance following one of the worst recessions in Europe, we think growth is set to shift down a
gear over the next 10 years, despite the country's accession to the eurozone, as it struggles with competitiveness and demographic
challenges.
TABLE: Long-Term Macroeconomic Forecasts...21
LATVIA Q4 2014
Chapter 4: Business Environment 23
SWOT Analysis... 23
BMI Business Environment Risk Ratings 23
Business Environment Outlook. 24
Institutions 24
TABLE: BMI BUSINESS and OPERATION RISK RATINGS....24
TABLE: BMI LEGAL FRAMEWORK RATING....25
Infrastructure. 26
TABLE: LABOUR FORCE QUALITY..26
TABLE: EMERGING EUROPE - ANNUAL FDI INFLOWS....27
Market Outlook... 28
TABLE: TRADE and INVESTMENT RATINGS28
Operational Risk. 29
Chapter 5: Key Sectors... 31
Pharmaceuticals and Healthcare... 31
TABLE: Pharmaceutical Sales, Historical Data And Forecasts32
TABLE: Healthcare Expenditure Trends, Historical Data And Forecasts 33
TABLE: Government Healthcare Expenditure Trends, Historical Data And Forecasts... 33
TABLE: Private Healthcare Expenditure Trends, Historical Data And Forecasts... 33
Other Key Sectors... 35
table: Telecoms Sector Key Indicators35
table: Autos Sector Key Indicators.35
table: Infrastructure Sector Key Indicators.35
table: Food and Drink Sector Key Indicators....36
table: Freight Key Indicators36
Chapter 6: BMI Global Assumptions. 37
Global Outlook.... 37
US Revision Drags Down Forecast.37
Table: Global Assumptions37
Table: Developed States, Real GDP GrowtH, %..38
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %.. 38
Table: Emerging Markets, Real GDP Growth, %.39

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Ahmad

+1 718 618 4302

ref:plp2014

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.