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Latvia holds position as EU growth leader: data

07 December 2012, 13:32 CET
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(RIGA) - Latvia remains top of the European Union growth table after rebounding from the world's deepest recession, data in the Baltic state showed on Friday.

Revised figures from the Latvian statistics office showed that the economy expanded by 5.2 percent in the third quarter compared to output in the same period in 2011, making it the best performer in the 27-nation bloc.

The equivalent figure in the second quarter was 5.0 percent, after 6.9 percent in January to March.

Compared with the second quarter, meanwhile, the economy expanded by a seasonally adjusted 1.7 percent over July to September, after 1.3 percent in the previous three months.

Friday's data keep Latvia on track to post annual growth in excess of four percent for the second year in a row, after 5.5 percent in 2011.

The EU's executive European Commission forecasts that Latvia's will record a table-topping 4.3 percent this year compared with 2011, ahead of neighbours Lithuania and Estonia on 2.9 percent and 2.5 percent respectively.

All three Baltic states have emerged from what have been among the deepest recessions in the world, and have imposed austerity measures far beyond those applied by West European countries.

Latvia, a former Soviet-ruled republic of two million people, has been hailed by organisations such as the International Monetary Fund as an example of austerity bearing fruit thanks to its completion last year of a three-year, 7.5-billion-euro ($10 billion) international bailout programme.

The rescue was followed Latvia's swing from breakneck growth into a spectacular slump during which its economy shrank by a cumulative 25 percent in 2008-2009.

Latvia aims to adopt the euro in 2014, following the lead of Estonia, which entered the currency bloc in 2011, and ahead of Lithuania's planned 2015 entry.

Unfazed by the eurozone crisis, Latvia and Lithuania alike argue that it makes sense for their small economies to join the troubled monetary bloc because their main trade partners are already inside.

"The benefits would greatly outweigh the potential losses," Finance Minister Andris Vilks told Latvian public radio Friday, rejecting threats by opposition parties to press for a referendum on euro adoption.

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