Latvia GDP Q1 2016


Economic activity loses vigor in Q1

Latvia’s economic activity decelerated substantially at the turn of the year. According to a preliminary estimate released by the National Statistics Office on 29 April, GDP increased 1.8% in Q1 over the same period last year. The print came in below the 2.7% expansion registered in Q4 2015 and marked the weakest increase since Q1 2015, when the economy grew also at a 1.8% pace.

Although a detailed breakdown of data was not released with the preliminary estimate, the statistical office signaled that economic growth in Q1 was mainly supported by a 2.3% expansion in trade and growth of 0.5% in manufacturing. However, growth was dragged by a contraction in the construction sector.

A quarter-on-quarter comparison confirms the deceleration suggested by the annual data. GDP, when adjusted for seasonal factors, decreased 0.1% in Q1, which followed the 0.4% contraction registered in Q4. More complete data will be published on 31 May.

The Central Bank revised its GDP growth forecast and now expects the economy to expand 2.3% this year, which revised down from its previous 2.7% estimate. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.9% in 2016, which is unchanged from last month’s projection. For 2017, panelists expect the economy to expand 3.3%.

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Latvia GDP Chart

Latvia GDP Q1 2016

Note: Year-on year changes of GDP in %.
Source: Central Statistics Bureau and FocusEconomics Consensus Forecast.

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