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Latvia's economy will expand 9% in 2007

Latvia's economic growth, the fastest in the European Union, will slow to around 9% this year, compared with 12% in 2006, the Economy Ministry said in a development report on its Web site today.

The Baltic country's inflation rate will be 6.5% this year, the fourth year in a row above an average of 6%, the ministry said. The quick growth will reduce unemployment to 6% for 2007 from 7.1% the previous year, the ministry said. Credit agency Standard & Poor's warned the Baltic country that its high growth rate was not due to „balanced and sustainable development,” and growing imbalances threatened the country with a „hard landing,” in a statement February 19. Latvia's GDP expanded a preliminary 11.9% in the Q4, the seventh three-month period in a row with growth above 10%. (Bloomberg)