Latvia GDP Q2 2016


Economic growth stabilizes in Q2; sequential data suggest improvement

Following a deceleration in the first quarter, Latvia’s economy stabilized in the second quarter. According to a preliminary estimate released by the Central Statistical Bureau of Latvia (CSB) on 29 July, GDP increased 2.1% in Q2 over the same period last year, which matched the growth rate registered in Q1.

Although a detailed breakdown of data was not released with the preliminary estimate, the CSB signaled that economic growth in Q2 was supported by a 7.0% increase in manufacturing and a 3.0% expansion in retail trade. Conversely, the construction sector plunged a massive 22.0%, which weighed heavily on overall economic activity.

Sequential data were more encouraging about the state of the economy. A quarter-on-quarter comparison showed that GDP, when adjusted for seasonal factors, accelerated and increased 0.4% in Q2. The result was up from the 0.1% rise recorded in Q1. More complete data will be published on 31 August.

The Central Bank expects the economy to expand 2.0% this year. For 2017, The Bank projects that economic growth will rise to 3.0%. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.4% in 2016, which is unchanged from last month’s projection. For 2017, panelists expect the economy to expand 3.1%.

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Latvia GDP Chart

Latvia GDP Q2 2016

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

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