Latvia: Q1 slowdown in GDP confirmed
June 9, 2014
In the first quarter, the economy increased 2.8% over the same period last year according to more complete GDP data released by Statistics Latvia on 9 June. The reading was in line with the preliminary estimate and followed the 3.6% expansion tallied in the fourth quarter.
Q1’s result reflected slower growth in domestic demand. Private consumption expanded 2.1% annually in Q1 (Q4: +4.3% year-on-year) and government spending grew 3.6% (Q4: +5.6% yoy). Conversely, gross fixed investment expanded 2.2% in the first quarter, thus gaining some of the ground that was lost in the previous quarter (Q4: -10.3% yoy).
On the external side of the economy, exports accelerated from the flat growth rate observed in Q4 to a 2.3% increase in Q1. While imports decreased 1.7% in Q1, the drop was not as sharp as in Q4 (-3.0% yoy). As a result, the contribution from net trade rose from 1.9 percentage points in the fourth quarter to 2.5 percentage points in the first.
Author: Ricardo Aceves, Senior Economist