GDP growth accelerates slightly in 2Q
The Latvian economy accelerated slightly in the second quarter this year, after a temporary soft patch. According to the flash estimate, GDP grew by 0.4% quarterly (swda). Growth remained at quite modest 2.1% (nsa) on an annual comparison.
Growth was hampered by a 22% YoY drop in value added in construction, indicating that investments most likely also were lower than a year ago. Household consumption remained cautious – retail trade turnover annual growth decelerated to 1.9% (1.3% net of fuel). Exports volumes of goods and services have likely returned to growth – in nominal terms growing by 0.4% YoY in Apr-May, while export prices were still decreasing. Industry’s value added grew by 7% annually.
We will revise down our current growth forecast of 3% for this year, closer to 2%. While still growing somewhat cautiously (slower than income), household consumption will remain the main growth driver for this year. Gradual turn of enterprise credit cycle (credit stock of non-financial institutions already almost reached the previous year’s levels in June), in turn, will add to investment activity.
For more information please contact Mr. Andrejs Semjonovs, +371 67445844, firstname.lastname@example.org ________________________________________
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