Latvia Economic Outlook
June 2, 2020The economic panorama is darkening further in Q2, after the economy shrank for the first time in nearly a decade in Q1. Plunging consumer demand chiefly drove the first-quarter contraction, with household consumption contracting at the sharpest rate in over 10 years amid constraining effects of Covid-19. Turning to Q2, business sentiment plunged to an over 10-year low in April and slipped further in May, signaling that private sector activity will have contracted sharply in the quarter. Similarly, restrictions to contain Covid-19 likely curtailed consumer spending in April–May, as unemployment likely soared, while collapsing external demand continued to hinder exports. More positively, however, authorities have been gradually easing restrictions since early May which should give the economy some much-needed respite at the end of Q2.
Latvia Economic GrowthThe economy is expected to shrink substantially this year, as Covid-19 wreaks havoc on domestic demand and dampens external demand. Contracting fixed investment and a plunge in household consumption are set to spearhead the overall downturn, although sturdier public spending, amid the government’s support measures, should soften the blow. FocusEconomics panelists see GDP contracting 6.6% in 2020, which is up 0.6 percentage points from last month’s forecast. In 2021, the economy is expected to rebound and grow 5.3%.
Latvia Economy Data
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Latvia Economic News
July 6, 2020
Industrial output slid 6.4% in year-on-year terms in May, which was a smaller drop than April's 9.2% decrease.
June 8, 2020
Consumer prices dropped 0.37% in May over the previous month, a softer drop than the 0.55% drop logged in April.
June 3, 2020
Industrial output slid 9.2% year-on-year in April (March: -3.5% yoy).
May 29, 2020
The economy shrank 1.5% year-on-year in the first quarter, according to detailed national accounts data released by Latvia’s Statistical Institute on 29 May.
April 30, 2020
The economy shrank 1.4% year-on-year in the first quarter of this year, according to preliminary national accounts data released by Latvia’s Statistical Institute on 30 April (Q4 2019: +1.0% year-on-year).