Oct. 6 (Bloomberg) -- The Latvian Finance Ministry raised this year’s economic growth forecast to 4.5 percent from 3.3 percent and warned that 2012’s expansion may be affected by global weakness.
“Thanks to stronger than estimated growth in economic activity, tax revenue has developed above the planned level,” said Finance Minister Andris Vilks, in an e-mailed statement. “Its possible that at the end of the year, slower growth in the global economy will slow Latvia’s pace of expansion.”
The economy grew 5.6 percent in the second quarter, the quickest pace in 3 1/2 years, after contracting by almost a quarter since 2008 following the end of the credit-fueled real- estate bubble. The government turned to the European Commission and the International Monetary Fund for a 7.5 billion-euro ($10 billion) loan in 2008 after the second-biggest bank needed a state rescue.
Ministries should not allow spending to rise in the last few months of the year due to growth risks, he said. The budget deficit stood at 103.7 million lati ($194 million) in the first nine months, compared with a shortfall of 353.4 million lati in the same period a year earlier, according to the statement.
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