Republic of Latvia : 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Latvia

Macroeconomic conditions are broadly favorable: the output gap is almost closed; the fiscal and current account deficits are at sustainable levels; and unemployment continues to fall. Nevertheless, GDP growth has slowed recently, hampered by a weak external environment, diminishing productivity gains, and delays in EU funds absorption. Credit growth remains elusive, wage pressures have surfaced, and the gray economy remains pervasive.