Macroeconomic Forecast Latvia

According to the Bank of Latvia, the current account recorded a EUR1.64bn surplus during January-November, a sharp turnaround from the EUR2.92bn deficit posted over the same period a year earlier. As a result of the government's internal devaluation strategy, which is crushing domestic demand, we expect the current account to remain in the black in 2010, and forecast a full-year surplus of EUR1.29bn, equivalent to 8.0% of GDP.

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