Wed, 21 Jan 2009: EC: Baltic recession to be worse than expected …



Th e commission said that Latvia would likely see the largest contraction, with the GDP expected to shrink by 6.9 percent this year and 2.4 percent next year. The Latvian economy has already seen a 2.3 percent drop in 2008. "The recession, which started in the first half of 2008 and originated in the reversal of the domestic real estate boom, turned worse during the second half of the year, when risk aversion became extreme on global financial markets," said the Commission report. "The real economy, especially domestic demand, is facing a very severe downturn," it said. Despite shrinking domestic demand and prospects for sharply lower wage growth, inflation is forecast to remain around 7 percent in 2009, as a result of VAT and exc... Read the rest of this entry »

Comments are closed.