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Latvia GDP Q3 2023

Latvia: GDP declines at a slower pace in Q3

According to a preliminary estimate, GDP fell at a slower rate of 0.1% year on year in the third quarter, above the 1.1% contraction recorded in the second quarter. Q3’s reading marked the best result since Q4 2022. Early data showed that the decline stemmed from the services sector swinging into contraction from the previous quarter, while the producing sectors fell less than in Q2.

Meanwhile, on a seasonally adjusted quarter-on-quarter basis, GDP bounced back, growing 0.6% in Q3, contrasting the previous quarter’s 0.3% contraction.

A comprehensive breakdown will be published on 30 November.

Analysts at SEB commented on the outlook:

“The economy will remain stagnant for the next 2-3 quarters. […] With inflation falling but nominal wage growth high, real wage growth has already resumed, but it will take several quarters before we see a sustainable recovery in consumption. […] A positive contribution to growth is expected from public investments, with an increase in the inflow of EU funds. This should also stimulate private capital spending.”

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