Latvia: GDP expands at the swiftest pace in over 13 years in Q2
The economy surged 11.1% year-on-year in the second quarter of 2021, according to detailed national accounts data released on 31 August. The reading showed a notable rebound from the 1.3% contraction logged in Q1, and was also above the 10.3% increase reported in the preliminary Q2 release. The result represented the quickest expansion in over 13 years, but was somewhat buttressed by a low base effect, as Q2 2020 saw a correspondingly steep contraction.
Q2’s upturn was mainly due to a marked rebound in household spending (Q2: +16.0% yoy; Q1: -7.3% yoy), as well as fixed investment (Q2: +11.2% yoy; Q1: -4.5% yoy). Moreover, government spending growth rose to 7.1% in the second quarter, quickening from the previous quarter’s 2.9% rise.
Meanwhile, exports of goods and services increased 16.0% year-on-year in Q2, contrasting the 0.9% drop logged in the previous quarter, while imports grew 32.2% annually (Q1: 0.0% yoy).
On a seasonally-adjusted quarter-on-quarter basis, GDP rose 4.4% in Q2, bouncing back from the 1.6% contraction posted in the prior quarter.