Latvia: Revised Q4 data confirm deceleration in GDP
March 11, 2014
According to revised data published by the statistical office on 11 March, GDP increased 3.6% over the same quarter of the previous year in Q4. The reading was revised up from the 3.5% expansion reported in the flash estimate and represented a deceleration over the 4.6% increase observed in Q3. On a sequential basis, GDP increased 0.8% in seasonally-adjusted terms in Q4, which came in below the 1.2% expansion recorded in Q3. Q4's result mainly reflected that slower growth in domestic demand offset an improvement in the external sector. Private consumption expanded 4.3% in the fourth quarter, which was down from the 4.9% increase observed in Q3. Government consumption, however, accelerated from a 1.4% increase in Q3 to a 5.6% expansion in Q4. Conversely, gross fixed investment plummeted 10.3% in Q4, which contrasted the 3.0% expansion observed in Q3. Growth in exports of goods and services was flat in the fourth quarter, which was nevertheless an improvement over the 1.3% contraction recorded in Q3. Imports fell 3.0% over the same quarter of the previous year, which followed the 1.4% contraction tallied in Q3. As a result, the external's sector net contribution to overall economic growth improved from 0.1 percentage points in Q3 to 1.8 percentage points in Q4. In the full year 2013, GDP expanded 4.1%, which was weaker than the 5.3% increase in 2012. In its January Macroeconomic Developments Report, the Central Bank indicated that it expects the economy to expand 4.1% in 2014. FocusEconomics Consensus Forecast panelists expect the economy to grow 4.2% in 2014, which is down 0.1 percentage points from last month's projection. For 2015, panelists expect the economy to expand 4.1%.
Author: Ricardo Aceves, Senior Economist