Latvia skyline

Latvia GDP Q2 2022

Latvia: GDP growth grows at softest pace in over a year in Q2

GDP growth moderated to 3.0% year on year in the second quarter, from 6.7% in the first quarter. Q2’s reading marked the lowest reading since Q1 2021. That said, it came well above the 2.6% year on year figure logged in the flash estimate.

The reading was mainly driven by muted demand amid surging price pressures: Private consumption increased 7.9% in the second quarter, which was below the first quarter’s 14.7% expansion. In contrast, government spending improved to a 2.7% increase in Q2 (Q1: +0.3% yoy). Meanwhile, fixed investment growth accelerated to 2.7% in Q2, from the 1.9% expansion in the prior quarter.

Exports of goods and services increased 9.1% on an annual basis in the second quarter, which was below the first quarter’s 9.4% expansion. In addition, imports of goods and services growth waned to 11.2% in Q2 (Q1: +15.4% yoy).

On a seasonally-adjusted quarter-on-quarter basis, GDP declined 1.0% in Q2, contrasting the previous period’s 3.4% expansion. Q2’s reading marked the sharpest decrease since Q2 2020.

Looking ahead, GDP growth is expected to moderate further in Q3. Sky-high inflation, elevated geopolitical tensions and the repercussions from the war in Ukraine are expected to keep a lid on the economy. Commenting on the medium-term outlook, Analysts at EIU remarked: “Although elevated government consumption will counterbalance some of these developments, we nonetheless expect economic growth to weaken to 2.8% in 2022 and 1.4% in 2023, as economic uncertainty gradually puts a damper on the economy. Risks remain strongly tilted to the downside”.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest