Bloomberg News

Latvian 2011 GDP to Grow at Least 4%, IMF’s Griffiths Says

October 06, 2011

(Updates with last paragraph.)

Oct. 6 (Bloomberg) -- Latvia’s gross domestic product will expand at least 4 percent as the economy weathers the effect of Europe’s debt crisis, said Mark Griffiths, the International Monetary Fund’s mission chief for the Baltic country.

“The economic situation is getting better, GDP could grow 4 percent or even higher this year,” said Griffiths, at a press conference in Riga today. “The difficulties in Europe will effect Latvia but to a less extent” than previously in 2008, he said.

Latvia’s 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 credit-fueled real- estate bubble. The government was forced to turn to a group led by the European Commission and the IMF for a 7.5 billion-euro ($10 billion) loan in 2008 after the second-biggest bank needed a state rescue.

The commission and IMF are in Latvia as part of a pre- review mission to look at the budget and economic estimates, the effect of a capital increase in airline AirBaltic AS and plans to split state-owned Hipoteku Banka AS, Griffiths said.

Latvia’s mission with the EU and IMF ends in December. The IMF forecast the country’s GDP growth at 4 percent this year and 3 percent next year in its European outlook released yesterday.

--Editors: James M. Gomez, Alan Crosby

To contact the reporter on this story: Aaron Eglitis in Riga at aeglitis@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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