Latvia GDP


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.

The Central Bank indicated that it expects the economy to expand 4.1% in 2014. FocusEconomics Consensus Forecast panelists expect the economy to grow 3.8% in 2014, which is down 0.1 percentage points from last month’s projection. For 2015, panelists also expect the economy to expand 3.8%.

Author:, Senior Economist

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Latvia GDP Chart

Latvia GDP Q1 2014

Note: Year-on year changes of GDP in %.
Source: Central Statistics Bureau and FocusEconomics Consensus Forecast.

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