Slowdown in Latvian economy

After the dramatic credit cutbacks by major Latvian banks a few months ago, the Latvian economy is clearly slowing down.

At the beginning of this year, at the peak of the Latvian boom, retail sales in Latvia were growing at 28% year-on-year. (It's hard to believe, but it was 28% after adjusting for inflation.) Now, October statistics are out and the increase in retail sales is down to 8.9% year-on-year. And, looking at the monthly data, the October sales are actually down 0.8%, compared to June when the slowdown begun.

The economic trend is clearly changing and the multi-year economic boom is over. It's still not clear if it will be a soft or a hard landing for Latvian economy. The opinions around me differ, with friends closer to real-estate business (which has been affected by the credit cutbacks more than anything else) being the most pessimistic (as in "It can be a vary hard landing").