Economy grows 2.5% in second quarter

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In the second quarter of 2014, Latvia's Gross Domestic Product (GDP) grew by a steady 2.5% compared to the same quarter in 2013, a first estimate by the Central Statistical Bureau (CSB) said Monday.

Compared to the first quarter of 2014, the economy grew by a modest 1%, the data said. 

The equivalent figures for the first quarter of the year had been year-on-year growth of 2.8% and quarter-on-quarter growth of 0.6%.

"GDP was affected by a value increase of 4% in retail trade. Increase in construction accounted for 16%. In services (except trade) and in manufacturing the indicator stayed at the level of the 2nd quarter of 2013, while industry in total witnessed a decline of 1%," the CSB said in its data release.

Responding to the news, the Latvian Finance Ministry admitted the growth was "lower than expected".

"It should be noted that Latvian economic growth in the second quarter started to be negatively impacted by the geopolitical and economic situation in the region," the ministry said in reference to he situation in Ukraine and Russia, while insisting their were "positive trends in the labor market."

A separate data release showed that in June compared to May the value of exports decreased by 3.8%, and imports by 0.2%.

Latvia's foreign trade balance worsened slightly as exports as a percentage of total foreign trade declined to 44.1%.

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