Latvia: Economic growth remains robust in final quarter of 2011
February 9, 2012
In the fourth quarter, GDP grew 5.0% over the same period the previous year, according to a preliminary flash estimate released on 9 February by the Central Statistics Bureau of Latvia. The fourth quarter increase followed the already strong 6.6% expansion observed in the third quarter and represented the sixth consecutive increase, following nine periods in a row of economic contraction. A quarter-on-quarter comparison saw GDP rising 0.8% in seasonally adjusted terms (Q3: +1.7% quarter-on-quarter). Based on quarterly figures, the economy expanded 5.2% for the full year 2011, which contrasted the 0.3% contraction witnessed in 2010 and the devastating 17.7% plunge observed in 2009. A revised and more complete national accounts data set will be published on 9 March. Additional indicators also suggest a moderation in economic activity. Industrial production expanded 3.2% annually in December (November: +8.5% year-on-year), which marked the weakest expansion in 22 months. For the full year 2011, industrial production grew 9.0%, slower than the 14.3% expansion observed in 2010. In its January Macroeconomic Developments report, the Central Bank revised its growth projections for this year and now expects the economy to grow only 1.3%, down from its previous 3.3% estimate. The Bank cited weak growth in Latvia's major export destinations as the main reason for its revision.
Author: Ricardo Aceves, Senior Economist