Latvia is expected to experience the sharpest economic downturn from the Baltic countries this year, while the fastest growth next year, according to the autumn forecasts of the world economy published by the International Monetary Fund (IMF) on Tuesday.
In its latest World Economic Outlook, the IMF forecasts that the Latvian economy will contract by 6% this year, which is less than 8.6%, as estimated in previous forecasts in April. Next year, the IMF forecasts a 5.2% increase in Latvia’s gross domestic product, which is less than the 8.3% growth forecast six months ago.
The IMF estimates that consumer prices in Latvia will increase by 0.6% this year, but next year inflation will be 1.8%.
According to IMF calculations, unemployment in Latvia will reach 9% at the end of this year, but will decrease to 8% next year.
The IMF also forecasts that the current account of the balance of payments in Latvia will have a surplus of 2% of GDP this year, but a deficit of 0.8% of GDP is forecast for next year.
Of the Baltic countries, the IMF expects the second sharpest decline in GDP this year in Estonia, where it is forecast to fall by 5.2%, while next year the IMF expects 4.5% growth in the Estonian economy. In April, the IMF estimated that Estonia’s GDP would shrink by 7.5% this year.
Inflation in Estonia is forecast at 0.2% this year, but at 1.8% next year.
Estonia’s current account is projected to have a surplus of 4% of GDP this year, which could shrink to 2% next year. The IMF expects the unemployment rate in Estonia to rise to 7.8% by the end of this year and estimates that it will fall to 6.1% next year.
In Lithuania, the IMF forecasts an economic decline of 1.8% this year, but growth of 4.1% next year. In April, the IMF forecast an economic downturn of 8.1% this year.
The IMF expects inflation in Lithuania to be 1.3% and 1.7% this year and next, respectively.
Lithuania’s current account is projected to have a surplus of 7.2% of GDP this year, and a surplus of 4.5% of GDP next year.
Unemployment in Lithuania, on the other hand, according to IMF estimates, will reach 8.2% at the end of the year, but will fall to 7.5% next year.
In the eurozone as a whole, the IMF forecasts a 8.3% drop in GDP this year, while economic growth is estimated at 5.2% next year.
Inflation in the single currency area of 19 countries is expected by the IMF to be 0.4% and 0.9% this year and next. The current account is projected to have a surplus of 1.9% of GDP this year and a surplus of 2.4% next year. Unemployment in the eurozone is forecast at 8.9% this year, but will fall to 9.1% next year, according to the IMF’s spring forecasts.
In Europe’s largest economy, Germany, GDP is forecast to fall by 6% this year and to grow by 4.2% next year.
The IMF forecasts that GDP in the UK will shrink by 9.8% this year and grow by 5.9% next year.
The IMF forecasts a recession in the US economy of 4.3% this year, but growth is estimated at 3.1% next year, while Japan’s GDP will fall by 5.3% this year and GDP is expected to grow by 2.3% next year.
In China, economic growth is forecast at 1.9% this year and 8.2% next year, while in India GDP is expected to fall by 10.3% this year and 8.8% next year.
In Russia, the IMF forecasts a 4.1% drop in GDP this year, and 2.8% economic growth is expected next year.
The IMF forecasts a 4.4% decline in the global economy this year, while growth is forecast at 5.2% next year.
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