Macroeconomic Forecast Latvia

According to the seasonally adjusted estimate provided by Statistic Latvia, the economy posted positive (albeit anaemic) growth of 0.3% in Q1 compared to previous quarter. However, real GDP still contracted by 6.0% y-o-y, which although supportive of our -2.3% full-year forecast, nonetheless indicates that Latvia is still mired in recession, with all sectors apart from industry experiencing a significant decline during the first three months of the year. That the rate of decline has decelerated sharply from 16.9% y-o-y in the fourth quarter of 2009 certainly suggests that the worst of the depression has now passed, with economic activity set to stabilise further this year

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