Changes of GDP in the first quarter of 2004 through the third quarter of 2009, at constant prices. Source: Latvian Department of Statistics

RIGA — The worst of the economic crisis may be over in Latvia, but that doesn’t mean a quick recovery is around the bend.

The Latvian Department of Statistics released its estimated gross domestic product figures for the third quarter of 2009 Monday, and while the economy still shrank it’s nosedive lessened.

The statistics department estimates that Latvia’s GDP slid -18.4 percent in the third quarter, a lesser drop than the second quarter’s -18.7 percent.

The estimate shows that Swedbank, Latvia’s largest by assets, was correct in optimistically predicting in October that the economy had bottomed out.

“Early signs of recovery are already visible globally, however, one must take into account that the pace of this recovery will be slow. In terms of volume, the Latvian economy has relapsed onto 2005 levels,” Maris Mancinskis, the CEO of Swedbank’s Latvian operations said in a press release.

The Latvian Ministry of Finance does not see the marginal improvement in GDP decline as a signal that growth will resume anytime soon, predicting that a full recovery will not take place until after 2010. Meanwhile deflation will ride the coattails of the GDP’s lessening slump.

“We project a further lowering of prices and we also see low confidence levels in consumers that is why we also predict deflation to follow for some time,” Diāna Krampe, finance ministry spokeswoman told Baltic Reports. “In regards to GDP we say that we predict starting from the last quarter the GDP fall rate will slow. The GDP will continue to fall only until 2011.”