Fixed Investment in Latvia
Latvia recorded an average fixed investment growth rate of 1.2% in the decade leading to 2022, below the 2.2% average for the Euro Area. In 2022, fixed investment growth was 0.6%. For more investment information, visit our dedicated page.
Latvia Investment Chart
Latvia Investment Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Fixed Investment (ann. var. %) | 1.5 | -2.2 | 7.2 | 0.6 | 8.2 |
Economy returns to growth in Q1
A second national accounts release revealed that GDP rebounded in the first quarter, expanding 0.1% year on year. Q1’s upturn marked the best result since Q1 2023 and was above both the 0.5% contraction recorded in the fourth quarter of last year and the preliminary estimate of a 0.2% decrease. On a seasonally adjusted quarter-on-quarter basis, economic activity increased 0.9% in Q1, above the previous quarter's 0.4% decrease. Q1's reading marked the strongest reading since Q1 2022.
The annual upturn reflected improvements in private and public spending, plus a softer decline in exports compared to the previous period. Private spending rebounded 0.7% in the first quarter, which was above the fourth quarter's 0.9% contraction. Moreover, government consumption grew at the fastest pace in over 17 years, expanding 8.2% (Q4 2023: +7.5% yoy). Meanwhile, fixed investment sung into contraction, falling 9.3% and contrasting the 12.1% expansion logged in the previous quarter. On the external front, exports of goods and services dropped 3.1% on an annual basis in the first quarter, which was above the fourth quarter's 5.9% contraction. Conversely, imports of goods and services contracted at a steeper pace of 6.4% in Q1 (Q4 2023: -4.4% yoy).
Our Consensus is for GDP growth to accelerate in Q2 and for the economy to rebound overall in 2024. Recovering private consumption and exports will outweigh slower growth in fixed investment and government spending. Downside risks include lower-than-expected EU fund disbursement and a weaker-than-anticipated recovery in external demand, plus higher-for-longer interest rates.
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Latvian investment projections for the next ten years from a panel of 9 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable investment forecast available for Latvian investment.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Latvian investment projections.
Want to get access to the full dataset of Latvian investment forecasts? Send an email to info@focus-economics.com.
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