Latvia: GDP growth tempers in Q3 as base effect subsides
October 28, 2021
GDP expanded 4.8% on an annual basis in the third quarter of 2021, according to preliminary national accounts data released by Latvia’s Statistical Institute on 28 October. The result followed the 10.8% surge recorded in Q2 which had marked the strongest expansion since Q3 2007, although the reading was flattered by a low base effect. Additionally, GDP growth moderated to 0.3% in seasonally-adjusted quarter-on-quarter terms in Q3, following the 2.5% expansion in Q2 and marking the lowest result in over a year.
The third quarter’s slowdown was mainly driven by softer expansions across the services and producing sectors. That said, the result was affected by a fading base effect. More detailed national accounts data for Q3 will be released on 30 November.
Looking forward, annual GDP growth is expected to slow from current levels in the last quarter of 2021. An ongoing surge in new Covid-19 cases and a consequent four-week lockdown imposed on 21 October is expected to temper activity.
Author: Jonuel Pérez, Junior Economist