Bank of Latvia upgrades GDP growth outlook to 5.3% for 2021

The Bank of Latvia has upgraded the GDP growth outlook from 3.3% to 5.3% for 2021, as confirmed by the central bank’s Monetary Policy Department lead Uldis Rutkaste at a presentation on Thursday, 30 September.
At the same time, the Bank of Latvia has downgraded Latvia’s economic growth outlook for 2022 from June’s original 6.5% to 5.1%. For 2023 Latvia’s GDP outlook is estimated at 3.8% when compared to the previously expected 3.6%.
Rutkaste says the global economic recovery relies on Covid-19 vaccine availability and the growing vaccination level.
Eurozone’s national economy continues recovering confidently and is currently close to the pre-pandemic level.
Recovery of Latvia’s national economy will happen sooner than previously expected. GDP will reach the pre-crisis level in Q2 2021, says Rutkaste. Nevertheless, activity I sectors affected by the pandemic the most and by restrictions the more directly, such as accommodation and catering, art and culture, as well as transport, are behind the level they were at before the crisis.
Following this rapid growth the Bank of Latvia has corrected its GDP 2021 growth outlook, increasing it to 5.3%.
However, if infection rates go up and vaccination stays low at the end of 2021 and start of 2022 economic recovery may become slower. This is why this year and the next growth rates are expected to be similar. The Bank of Latvia has downgraded GDP outlook for 2022 to 5.1%.