In the first half of the year GDP fell by 5.4 %.
With the the first quarter of the year also recording negative growth (-1.5%), the country is now officially in recession (the classic definition of recession being two consecutive quarters of negative economic growth).
In the second quarter GDP at constant prices was EUR 6.9 billion. As compared to the previous quarter, GDP fell by 6.5 % (according to seasonally and calendar adjusted data).
The CSB pointed out that the COVID-19 crisis lay behind most of the figures in all sectors, noting: "One of services sectors that was hit the hardest by COVID-19 pandemic was arts, entertainment and recreation, where the drop against the corresponding period of the previous year reached 46.3 %."
The volume of taxes on products (value added tax, excise and customs taxes) decreased by 7.6 %. Decrease was observed both in value added tax and excise duty revenues.
However, there were some more positive notes.
"As compared to the GDP flash estimate, total value added of sectors did not change, but the latest information on taxes on products concerning the period affected the overall estimate positively and increased GDP by 0.9 percentage points," the CSB said.
In the 2nd quarter of 2020, compared to the 2nd quarter of 2019, GDP in Latvia decreased by 8.9 % (according to seasonally and calendar non-adjusted data). In the first half of 2020 GDP has reduced by 5.4 %.https://t.co/VufCNQzb9x pic.twitter.com/oSsnnjVpPb— Statistics Latvia (@CSB_Latvia) August 31, 2020
Commenting on the statistics Swedbank said: "With the virus in Latvia still under control, many indicators point to a sharp rebound in activity in the summer months. Therefore, we should see much of the ground lost in the first half of the year, recover in Q3. Swedbank expects GDP to contract by 5% in 2020 and recover in 2021 and 2022 (growing 4.2% and 3.3% respectively), reaching pre-crisis levels at the start of 2022."