The forecast of Latvia’s gross domestic product (GDP) dynamics for this year and next is better than the average in the European Union (EU), Deputy Chairman of the European Commission (EC) Valdis Dombrovskis (JV) told LETA.
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He informed about the EC summer economic forecast for Latvia, which does not differ from the spring forecast, namely, this year Latvia’s GDP could decrease by 7%, but in 2021 the economy is expected to grow by 6.4%.
Dombrovskis added that the forecast of Latvia’s GDP dynamics this year and next is better than the EU and eurozone average. The EU as a whole is forecast to experience a recession of 8.3%, while growth is forecast for 5.8% next year.
At the same time, the EC has changed its economic growth forecasts for Latvia’s neighbors – if in the spring the EC forecasted a fall in Lithuania’s GDP of 7.9% this year, then the current forecast has been improved, ie Lithuania’s GDP could shrink by 7.1% this year. At the same time, the EC has significantly lowered Estonia’s GDP forecast – if the country’s GDP decline was estimated at 6.9% in the spring, then the latest forecasts suggest that Estonia’s GDP could shrink by 7.7% this year.
“The EC predicts that the European economy will recover in the second half of the year, but it must be emphasized that the overall economic dynamics will depend on how successfully the Covid-19 pandemic is overcome and how quickly the restrictive measures imposed by member states can be lifted,” Dombrovskis explained.
Speaking about the growth of the EU economy in 2021, Dombrovskis emphasized that it is important to reach an agreement between the EU member states on the European Economic Recovery Plan as soon as possible in order to give a strong stimulus to the economy next year.
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