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Economy / Latvia

Macroeconomic Forecast Latvia

December 2011 | Macroeconomic Forecasts

Latvia's current account turned to a deficit in October according to data released by the central bank. The deficit amounted to LVL29.2mn compared to a surplus of LVL23.4mn in the previous month. The deficit in the merchandise trade account widened to LVL121.4mn in October from LVL97.8mn in September as capital imports outstripped exports. We expect this trend to continue as the external environment weighs on companies' investment appetite and as lower demand dents exports. We forecast the current account to register its first deficit since 2008 at 0.7% of GDP in 2011 and to widen moderately in 2012 to 0.9% of GDP.

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