Latvia: GDP growth moderates in Q2
September 30, 2014
In the second quarter, the economy increased 2.3% over the same period last year, according to more complete GDP data released by Statistics Latvia on 30 September. The reading came in below the preliminary estimate of a 2.5% increase and followed the 2.8% expansion tallied in the first quarter.
Q2’s result reflected slower growth in domestic demand and a worse performance of the external sector. Private consumption expanded 2.3% annually in Q2 (Q1: +2.7% year-on-year) and government spending grew 4.9% (Q1: +5.2% yoy). Gross fixed investment slowed notably from Q1’s 9.3% expansion to a 1.8% increase.
On the external side of the economy, exports decelerated from the 3.4% growth in Q1 to a 1.7% increase in Q2. Imports picked up from a 0.5% expansion in the first quarter to a 2.3% rise. As a result, the net contribution from the external sector swung from plus 1.7 percentage points in the first quarter to minus 0.4 percentage points in the second.
A quarter-on-quarter comparison showed that GDP increased a seasonally-adjusted 0.9% in Q2, which came in above the 0.4% expansion tallied in Q1.