Latvia: Economy expands for third consecutive quarter but falls short of market expectations
May 10, 2011
In the first quarter, GDP expanded 3.4% over the same period last year, according to the flash estimate released on 10 May by the National Statistics Office. The increase represented the third consecutive quarter of an expanding economy, following nine straight quarters of contracting economic activity. That said, the first quarter reading marked a moderation in the pace of expansion compared to the previous quarter's 3.6% increase and undershot market expectations, which had seen GDP growth accelerating to 4.1%. A quarter-on-quarter comparison saw the economy growing 0.2% in seasonally adjusted terms, which came in at only a fraction of the 1.1% expansion observed in the previous quarter, pointing to an even stronger slowdown than suggested by the annual figures. A revised and more complete data set will be published on 9 June. Additional economic information shows that the country's industrial sector dragged on economic growth. Based on monthly industrial production data, the industrial sector expanded 9.0% year-on-year in the first quarter, which was half the 18.1% increase observed in the final quarter of 2010. Meanwhile, in its April macroeconomic report, the Central Bank expects the economy to expand 3.3% this year.
Author: Ricardo Aceves, Senior Economist