According to provisional estimates, GDP was affected by a drop of 1.3 % in producing sectors and a reduction of 4.0 % in services sectors.
Compared to the final quarter of 2020, GDP fell by 2.6 % (according to seasonally and calendar adjusted data).
Swedbank said the fall was "in line with expectations".
"Latvia saw a rather high virus spread and tight restrictions in the 1st quarter of 2021. Naturally – this is reflected in GDP figures. The virus situation started improving towards the end of the quarter, and some restrictions have been eased. However, the case count is still uncomfortably high and has started crawling up again, so further easing of measures could backfire. Nevertheless, there are signs of hope – the confidence indicators in April surpassed their long term average level for the first time since virus crisis hit," Swedbank said.
The Finance Ministry said "the larger decline was driven by the rapid spread of Covid-19 and operating restrictions on trade and a number of other service sectors to reduce morbidity."