Latvia: GDP growth in Q3 is the slowest in six years
October 31, 2016
In the third quarter, Latvia’s GDP increased just 0.8% from the same period last year, according to a preliminary flash estimate released by the Central Statistical Bureau of Latvia (CSB) on 31 October. The result was a substantial deceleration compared to the 2.0% expansion in the second quarter and marked the slowest pace of growth since Q4 2010.
Although a detailed breakdown of data was not released with the preliminary estimate, the CSB signaled that economic growth in Q3 was supported by a 2.0% increase in the industrial sector and a 1.0% expansion in services. Conversely, the construction sector plunged a massive 24.0%, which weighed heavily on overall economic activity.
Sequential data were less discouraging about the state of the economy. Adjusted for seasonal and calendar effects, GDP grew 0.5% over the previous quarter in Q3. The result was a notch down the 0.6% rise recorded in Q2. More complete data will be published on 30 November.
Economic growth has been slowing for the past year. GDP growth came to 3.5% in Q3 2015 and has slowed down since then. Due to the recent sluggish performance, the economy remains on track to record its weakest growth rate since 2010, which marked the end of a protracted economic crisis in Latvia.
Author: Ricardo Aceves, Senior Economist