Economy grew 2% in 2016

Latvia's GDP increased by 2% during 2016, according to revised data released February 28 by the Central Statistics Bureau (CSB).

"In 2016, as compared to 2015, Gross Domestic Product (GDP) increased by 2.0 %. In 2016, GDP at current prices amounted to €25 bln, whereas at constant prices – to €21.8 bln," said the CSB.

In the 4th quarter of 2016, as compared to the 3rd quarter, GDP at constant prices grew by 1.1 % (according to seasonally adjusted data) and compared to the corresponding period of 2015, GDP grew by 2.2 % according to seasonally adjusted data, and by 2.6 % according to seasonally non-adjusted data.

In the 4th quarter, GDP at current prices amounted to €6.7 bln.

Citadele Bank economist Martins Abolins described the 2.6% rise in the fourth quarter as "a small but unexpected and pleasant surprise".

"The final quarter of 2016 was the best one of the year and, importantly, the GDP growth rate started to gather momentum despite the continued weak absorption of EU funds," he said.

"The higher potential for absorption of EU funds this year, along with the positive developments in recent months in the external economic environment suggests that the Latvian economic growth in 2017 could be close to 4%," Abolins said in an upbeat assessment.

In 2016 compared to 2015, the manufacturing sector grew by 6 %, the electricity, gas, steam and air conditioning supply sector experienced growth in the amount of 7 %, while production volumes in agriculture decreased by 3 %, with a 5 % drop experienced in crop production, while animal production remained at the level of the previous year.

The forestry and logging sector witnessed growth of 3 % and there was a 38 % increase in total fish catch, however, the fish catch in the Baltic Sea and Gulf of Riga dropped by 3 %.

Construction production volume decreased by 18 %. Retail trade increased by 2 %, Wholesale went up by 4 %.

The transport sector grew by 0.5 %. Passenger traffic increased by 4 %, whereas freight traffic dropped by 7 %.

Growth of 9 % was recorded in accommodation and food service activities.

Information and communication services were provided at a volume that was 3 % higher than that of 2015.

The finance and insurance sector experienced growth of 3.5 %, while the volume of arts, entertainment and recreation services increased by 3 %, with gambling and betting activities growing by 5 %, creative and arts activities – by 6 %, and sports activities experiencing a drop of 4 %.

Public administration and defence grew by 4 %, education – by 1 %, and health sector – by 2 %.

The volume of taxes (excise, value added and customs taxes) on products increased by 6 %.

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