Business Opportunities in Latvia Discussed in New BMI Report Recently Published at MarketPublishers.com28 Nov 2011 • by Natalie Aster
LONDON – With a centre-right coalition coming to power this September, the outlook for Latvia’s fiscal position becomes more optimistic. A combination of sustained fiscal austerity measures and improved revenue streams are expected to help facilitate a shrinking deficit. However, a combination of mounting macroeconomic headwinds and only a slim majority in parliament could threaten the fiscal reform drive.
Latvia’s real GDP is posed for 3.8% growth in 2011 and 2.9% in 2012 due to expectation that the external environment will continue to become less supportive of the country’s exports. Moreover, fiscal austerity measures likely to remain in place going into 2012 will preclude a positive contribution to growth from the government and will weigh on consumer spending.
New research report “Latvia Business Forecast Report Q1 2012” worked out by Business Monitor International (BMI) has been recently published at Market Publishers Ltd.
Title: Latvia Business Forecast Report Q1 2012
Published: November, 2011
Price: US$ 530
The report provides comprehensive analysis of political, economic and financial prospects in Latvia and is an essential tool for CEOs, chairmen, finance directors/CFOs, managing directors, marketing/sales directors with commercial interests in this emerging market.
- prospects for the pace and stability of Latvia's economic and industry growth through Q1 2012;
- identification and evaluation of adverse political and economic trends;
- assessment of the critical shortcomings of the business environment posing hidden barriers and costs to corporate profitability;
- assessment of Latvia's country risks against regional peers using the country comparative risk ratings system;
- evaluation of external threats to doing business in Latvia.
Major Forecast Changes
Key Risks To Outlook
CHAPTER 1: POLITICAL OUTLOOK
BMI Political Risk Ratings
Potential Challenges For The Government In 2012
Following a snap election in September 2011 which saw a three-party centre-right coalition come to power, we expect the Latvian government to remain stable in 2012. However, we highlight several potential challenges, including an ongoing austerity push amid a deteriorating macroeconomic backdrop, shoring up of support for the eurozone and corruption as a potential source of friction.
TABLE: POLITICAL OVERVIEW
Regional Political Outlook
The Eurozone Will Survive, But Resolution Will Take An Epic Crisis
Now more than any other time in its history the euro is at a crossroads which will determine its survival. The consequences of engineering a lopsided currency union have now come to bear as the eurozone debt crisis refuses to die down. While we expect the currency union to survive, albeit with different contours, we warn that it could take a Lehman-style crisis to force policymakers into action.
CHAPTER 2: ECONOMIC OUTLOOK
BMI Economic Risk Ratings
Growth Revision On Dimming External Environment
We have revised downward our expectation for Latvia’s economic growth in 2011 and 2012 despite the strong performance in the first half of 2011. We now forecast real GDP to post 3.8% growth in 2011 and 2.9% in 2012 on the back of our expectation that the external environment will continue to become less supportive of Latvian exports. Moreover, fiscal austerity measures likely to remain in place going into 2012 will preclude a positive contribution to growth from the government and will weigh on consumer spending.
TABLE: ECONOMIC ACTIVITY
Upbeat On Fiscal Accounts, For Now
We hold to our forecast for the Latvian fiscal deficit to fall to 4.8% of GDP in 2011 and to 2.8% in 2012, from the recently revised deficit of 8.2% of national output in 2010. We expect that a combination of sustained fiscal austerity measures and improved revenue streams will help facilitate the shrinking deficit. However, we highlight that a combination of mounting macroeconomic headwinds and only a slim majority in parliament could threaten the staid fiscal reform drive.
TABLE: FISCAL POLICY
Balance Of Payments
Return To Current Account Deficit In 2012
We forecast Latvia’s current account to return to deficit of 0.7% of GDP in 2012 after posting three years of surpluses. We believe that the pre-crisis balance of payments dynamics are to return in 2012, with the merchandise trade and income accounts posting deficits, and the services and current transfers to remain in surplus. Given the small nature of the deficit we forecast and the relatively strong external financing position, we do not foresee financing difficulties for the Baltic country at this juncture.
TABLE: CURRENT ACCOUNT
Inflation To Ease On Moderating Growth
We expect inflationary pressures to be more subdued in 2012 owing to our expectation for economic growth to slow in 2012 as the external environment becomes less conducive to strong growth. Furthermore, our Commodities and Oil & Gas teams believe that global prices in these commodities are unlikely to witness the same spike as was seen in H111. We forecast Latvia’s consumer price inflation to average 4.2% in 2011 and 2.8% in 2012.
TABLE: Monetary policy
CHAPTER 3: 10-YEAR FORECAST
The Latvian Economy To 2021
L-Shaped Recovery To Usher In Era Of Below-Trend Growth
We believe that economic growth in Latvia will be more subdued over the long term. What is more, with domestic demand set to remain under pressure as the private sector accounts for its excessive foreign borrowing in previous years, the export sector will become an increasingly important driver of economic growth over the long term.
TABLE: LON G-TERM MACROECONOMIC FORECASTS
CHAPTER 4: BUSINESS ENVIRONMENT
BMI Business Environment Risk Ratings
Business Environment Outlook
TABLE: BMI Business And Operation Risk Ratings
TABLE: BMI Legal Framework Rating
TABLE: Labour Force Quality
TABLE: Emerging Europe – Annual FDI Inflows
TABLE: Trade And Investment Ratings
TABLE: Top export destinations, 2001-2009
CHAPTER 5: KEY SECTORS
TABLE: Energy & Utilities Infrastructure Industry Data
TABLE: MAJOR PORT DATA
Other Key Sectors
TABLE: Food & Drink Sector Key Indicators
TABLE: Telecoms Sector Key Indicators
TABLE: Autos Sector Key Indicators
TABLE: Pharma Sector Key Indicators
TABLE: Freight Key Indicators
CHAPTER 6: BMI GLOBAL ASSUMPTIONS
Hanging On, Avoiding Recession
TABLE: GLOBAL ASSUMPTIONS
TABLE: EMERGING MARKETS AGGREGATE GROWTH
TABLE: DEVELOPED STATES REAL GDP GROWTH FORECAST
TABLE: REAL GDP GROWTH CONSENSUS FORECASTS
Business Forecast Reports Examining Other Countries & Regions are also Available:
- Mongolia Business Forecast Report Q1 2012
- Mauritius Business Forecast Report Q1 2012
- Iraq Business Forecast Report Q1 2012
- Ghana Business Forecast Report Q1 2012
- Francophone West Africa Business Forecast Report Q1 2012
- Egypt Business Forecast Report Q1 2012
- East Caribbean Business Forecast Report Q1 2012
- Cameroon Business Forecast Report Q1 2012
More new research reports by the publisher can be found at BMl page.
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Mrs. Tanya Rezler
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