Flash comment: Latvia - March 9, 2012:Latvian GDP rose by 5.5% in 2011

1. Flash comment: Latvia
Economic commentary by Economic Research Department March 9, 2012
Latvian GDP rose by 5.5% in 2011
Real GDP growth, %
Similarly to Estonia and Lithuania, Latvia’s GDP data for the fourth
10 5 quarter of 2011 were revised upwards. According to the Latvian
Quarterly, sa (rs)
Central Statistical Bureau, seasonally adjusted GDP rose by 1.1%
Annual, nsa
in the fourth quarter of 2011 compared to the previous quarter.
0 0 Although this is higher than the 0.8% shown by the flash estimate,
this is still a slowdown from the 1.5% in the third quarter.
In annual terms economic growth was 5.7% in the fourth quarter
-10 -5
(the flash estimate showed 5%). Investments (incl. inventories)
were by 25.6% higher than a year ago, exports were up by 9.1%,
household consumption by 4.1%. Government consumption growth
-20 -10 remained subdued, at 0.7%. Higher domestic demand and stronger
2008 2009 2010 2011
Source: CSBL
exports boosted also imports that grew by 13%.
The strongest growth among industries in the fourth quarter was in
Contribution to GDP growth, pp construction (26%), accommodation and food services (18.7%),
20 information and communications (9.9%), and manufacturing
(9.1%).
10
0 In 2011 overall, economic growth was 5.5%, mostly driven by
exports and investments.
-10
-20 Outlook
-30
Latvian economic growth is slowing. The risk of negative scenario
-40 is shrinking gradually, at least in short term, but there are still many
1Q 08 1Q 09 1Q 10 1Q 11 problems in the euro zone that need to be solved. Therefore, the
Households Government
Gross fixed cap.form. Inventories main driver of Latvian economic growth – exports – is expected to
Net exports GDP growth expand slower. Our GDP growth forecast remains at 2% for this
Source: CSBL
year.
Economic sentiment and GDP growth
120 20%
15%
110 10% Lija Strašuna
5% Senior Economist
100 + 371 6 744 5875
0%
-5% lija.strasuna@swedbank.lv
90
-10%
80 -15%
-20%
70 -25%
2008 2009 2010 2011 2012
ESI, points Annual GDP growth (rs)
Source: CSBL, DG ECFIN
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