Latvia on target for 2014 eurozone bid: statistics

(RIGA) - Eurozone hopeful Latvia was boosted on Friday by economic data which suggested that its bid to adopt the single currency in January was firmly on track.

Average annual inflation, a key benchmark for eurozone entry, stood at 1.2 percent in the first three months of the year, well within the eurozone limits according to data released by the national statistics office.

On a 12-month basis, consumer prices declined by 0.4 percent in April, it added.

"This inflation data is surprisingly low and I have no doubt that Latvia will keep meeting the benchmark," Andris Strazds, chief economist with Nordea bank in Latvia told AFP.

Riga insists that it already meets eurozone criteria on inflation, public debt and deficits.

It applied to the European Commission on March 5 for an assessment of its readiness to join the zone on January 1, 2014 and a decision is expected in early July.

Meanwhile, economic growth in the small former Soviet Baltic state was markedly stronger than that of most current eurozone members, growing by a seasonally unadjusted 3.1 percent in the first quarter of 2013 from the same period a year earlier.

That rate was lower however than the 5.1 percent jump in gross domestic product in the last quarter of 2012.

"On GDP, this is a kind of levelling off rather than a slowdown, so we will keep out forecast of slightly below 4.0 percent growth for this year, which is still achievable," Strazds said.

Economic growth does not determine whether a country is ready to join the eurozone, however.

Speaking in Riga during an official visit, Belgian Foreign Minister Didier Reynders, a former finance minister, voiced support for Latvia's bid to join the single currency bloc.

"It's essentially a political endeavour, not solely economic... I really hope the last hurdles will be overcome to welcome you into the eurozone on January 1st, 2014," Reynders said.

The former Soviet republic of two million would become the eurozone's 18th member.