Latvia's GDP fell 0.6% in 2023

A flash estimate published by the Central Statistical Bureau (CSB) January 29 shows that in the 4th quarter of 2023, compared to the 4th quarter of 2022, gross domestic product (GDP) decreased by 0.5 % (according to seasonally and calendar non-adjusted data).

According to provisional estimates, GDP was affected by a rise of 3.6 % in producing sectors and a drop of 0.7 % in services sectors. Collected taxes on products decreased by a substantial 9.2 %.

Compared to the 3rd quarter of 2023, GDP increased by 0.4 % (according to seasonally and calendar adjusted data).

However, if confirmed when adjusted GDP figures are published at the end of February, the data would mean that Latvian GDP fell by 0.6% in 2023 compared with 2022. 

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The Ministry of Finance tried to play up the positive side of the generally downbeat figures, suggesting the end of recessive tendencies might only be another quarter away.

"The development of Latvia's economy as a whole this year will continue to be determined by the situation in external markets, first of all, in the eurozone, where economic growth is predicted to be stronger than last year, although still at a historically low level. Economic growth in the eurozone is hampered by the high interest rates of the European Central Bank, but along with the decrease in inflation, a decrease in interest rates is also expected, which will have a beneficial effect on the growth of the eurozone.

"In the first quarter of the year, Latvia's economy could still slightly decrease on an annual basis, but already in the following quarters, as it recovers, GDP growth is predicted for the entire year as well. At the same time, growth rates continue to be slowed down by the geopolitical situation and very high uncertainty, which, first of all, negatively affects investment volumes," said the Ministry.

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