Latvia's economic growth has slowed. Has been relieved of investment by european union funds, and events on the international political stage are adversely affecting the global economy and free trade. Agnese buceniece, chief Professional Person and industry Email List economist of swedbank latvia, explains how latvian exporting producers feel and what are the forecasts for entrepreneurs working in the local and baltic markets. Reasons and opportunities for economic slowdown in the last two years, the latvian economy has Professional Person and industry Email List grown by almost 5%, which is a fantastic performance. However, growth slowed by almost half in the first half of this year. Although investment and household consumption continue to rumble in the economy, they are experiencing significantly lower capacity.
The large inflow of eu funds contributed to double-digit growth in investment and construction in 2017 and 2018, helping to Professional Person and industry Email List achieve rapid economic growth of 5%. This year, these funds have reached the peak of this eu budget programming period and will remain there until 2021, with no additional incentive for investment and construction, where a large proportion of the funds' money goes. At the beginning of this year, investment growth was about twice as slow, while construction growth was even four to Professional Person and industry Email List five times slower than last year. The year also started with slower growth in household consumption, which can be explained by slower growth in purchasing power and employment.
At the same time, the population evaluates the development of the national economy and their financial situation even better this year than last year. This is good news for businesses working for local consumers. Although the Professional Person and industry Email List mood of latvian companies or the assessment of the development of their business in general remains quite good, this year it has deteriorated at the expense of a weaker mood in the construction and manufacturing industries. Falling export orders in the Professional Person and industry Email List manufacturing industry and growing risks in foreign markets suggest that export performance will remain weak this year as well. However, despite the unfavorable global background, export growth could slightly outpace the weak performance last year.