RIGA, June 10 (LETA) - The Bank of Latvia has lowered its gross domestic product (GDP) growth forecast for this year to 1.2 percent from 2.1 percent, said Uldis Rutkaste, Head of the Monetary Policy Department of the Bank of Latvia, at a discussion organized by the Bank of Latvia on Tuesday.

The Bank of Latvia has also cut its GDP growth forecast for 2026 to 2.8 percent from 3 percent, while the economic growth forecast for 2027 has been cut to 3.2 percent from 3.3 percent forecast this past December.

The Bank of Latvia noted that the outlook for GDP growth in 2025 is more pessimistic than in the previously published forecasts.

At the same time, the central bank acknowledged that progress in the implementation of large investment projects, an increase in defense spending, as well as a reduction in uncertainty in trade policy would boost economic activity in the coming years.