Latvia's GDP growth modest in second quarter

Compared to the corresponding period of 2015, during the second quarter of 2016 seasonally and working days adjusted GDP grew by 0.7%, while seasonally and working days non-adjusted GDP increased by 2.1%.

The GDP changes were affected by a 7% increase in the added value of manufacturing and a 3% increase in retail trade, as well as a drop of 22% in the construction sector (seasonally and working days non-adjusted data).

Commenting on the data, Citadele bank economist Martins Abolins said: "The Latvian economy is continuing a low growth period and in the second quarter, the economy is likely to have slightly decelerated."

More robust economic growth is still hampered by the "Russian sanctions, the drying up of EU funds and a decline in construction, weak growth in Europe, problems in the dairy sector, as well as a fall in turnover through ports and railways," Abolins added.

Latvia's Finance Ministry responded by saying the data "shows Latvia is on a stable development path" and that growth of 2.1% puts it "among the fastest-growing economies in the European Union."