At the same time, in the forecasts published on Thursday, the EC expects that Latvia’s economy will grow by 2.2% next year.
On the other hand, inflation in Latvia is estimated at 15.5% this year, while next year’s agreed consumer price index increase is predicted at 6%.
The Commission points out that Latvia’s economy started the year 2022 with strong growth, thanks to consumer spending and exports. State support for consumer consumption in connection with the recovery from the crisis caused by the coronavirus pandemic will last another quarter or two, but it will end by the end of the year, taking into account the negative impact of inflation on the income of citizens. Meanwhile, raw material prices could have a positive impact on Latvia’s export of wood products, partially offsetting the negative impact caused by the economic crisis caused by Russia’s invasion of Ukraine.
The EC predicts the second fastest economic growth in the Baltic countries this year in Lithuania, where, according to EC estimates, GDP will increase by 1.9% this year. On the other hand, growth of 2.5% is predicted in the Lithuanian economy next year.
Inflation in Lithuania is estimated at 17% this year, and 5.1% next year.
In Estonia, the EC expects GDP growth of 1.6% this year, and growth of 4.7% next year. Inflation in Estonia this year and next year is forecasted at 17% and 4.7%, respectively.
The EC’s latest economic forecasts estimate that the EU economy is expected to grow by 2.7% this year, and by 1.5% next year. For the Eurozone, the EC forecasts economic growth of 2.6% and 1.4%, respectively.
Inflation in the EU this year and next year is expected to be 8.3% and 4.6%, respectively, while in the eurozone it will be 7.6% and 4.3%, respectively, according to EC forecasts.
The EC forecasts GDP growth for all EU member states this year. In the bloc, the EC predicts the fastest economic growth this year in Portugal (+6.5%) and Slovenia (+5.4%), while the lowest GDP growth is expected in Germany (+1.4%) and Estonia (+1.6%).
The Commission points out that the upheaval of the war started by Russia in Ukraine affects the EU both directly and indirectly, causing a slowdown in economic growth and a rise in inflation. Sharp increases in energy and food prices are fueling inflation around the world, undermining household purchasing power and prompting sharper-than-expected changes in monetary policy.
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