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Latvia maintains strong growth ahead of eurozone entry

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(Globalpost/GlobalPost)

Latvian growth accelerated in the third quarter ahead of the Baltic state's eurozone entry on January 1 and appeared bound to be the strongest in the EU, official data showed Monday.

Gross domestic product (GDP) rose by a seasonally-adjusted 1.2 percent in the third quarter, up from the 0.5 percent rate in the previous three-month period, Statistics Latvia said.

On an annual comparison, the economy grew by 4.2 percent in the third quarter compared to the same period last year, down from the 4.4 percent rate posted in the second quarter of 2013.

"The annual growth rate was similar to that in the first two quarters, which means that the Latvian economy is likely to remain the fastest growing in the European Union," Latvian central bank economist Liva Zorgenfreija told reporters.

The figures -- largely driven by a strong showing in the construction sector -- see Latvia continue its rebound from a spectacular slump in 2008-2009, when its economy shrank by nearly a quarter.

After recording flat growth in 2010, its economy expanded by five percent in 2011 and 2012, the top growth figures in the EU.

The finance ministry expects around 4.2 percent growth for this year and next.

The country of two million people received final backing in July to swap out its lats currency for the euro next year and become the second Baltic state, after Estonia, to make the switch.

Latvian Prime Minister Valdis Dombrovskis insists euro adoption will further boost the economy, but a majority of citizens remain opposed to the swap according to a September survey by the SKDS pollster.

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http://www.globalpost.com/dispatch/news/afp/131111/latvia-maintains-strong-growth-ahead-eurozone-entry