GDP

The indicator updated by the Central Statistical Bureau shows that gross domestic product (GDP) in the last quarter of 2012 grew 1.4% quarter-on-quarter (adjusted upwards by 0.1 percentage point). Year-on-year, GDP has grown by 5.1%. Since a broader perspective on GDP is currently available and previous data have also been adjusted slightly, we will look back at the year overall.

According to the flash estimate published by the Central Statistical Bureau (CSB), gross domestic product (GDP) grew 1.3% in the fourth quarter of 2012 (quarter-on-quarter, seasonal factors excluded). The annual growth rate was even higher, at 5.1%. Thus in 2012 overall, GDP grew by about 5.5%.

In the third quarter, gross domestic product (hereinafter, GDP) grew 5.2% year-on-year, according to the second estimate by the Central Statistical Bureau. The seasonally adjusted quarter-on-quarter increase was 1.7%. That means that total GDP for 2012 could grow more rapidly than predicted, with growth hovering around 5.0%. By the rate of growth, this places Latvia first among the European Union (EU) countries.

GDP contributors:

The flash estimate has confirmed the economic “breakthrough” evident in the operational data. In the third quarter, GDP has increased 1.7% quarter-on-quarter (seasonally adjusted data at constant prices). The rapid quarterly growth has also ensured a decent annual growth rate, i.e. 5.3%.

The adjusted data of the Central Statistical Bureau indicate that gross domestic product (GDP) at constant prices has grown in the second quarter by 5.0% year-on-year (unadjusted data). It has also grown 1.3% quarter-on-quarter (seasonally adjusted data). Thus no substantial adjustments of data have been made to the GDP flash estimate published a month ago (the quarterly growth has been adjusted upward by 0.3 percentage points and annual growth downward by 0.1 percentage points), yet the data published today represent more extensive statistical information and breakdown by GDP components.

According to the flash estimate by the Central Statistical Department gross domestic product (seasonally adjusted data at constant prices) in the second quarter grew 1.0% over the first quarter. It is a notable achievement, particularly against the background of other countries whose growth, under the impact of the European debt crisis, has slowed substantially.

The adjusted indicator published by the Central Statistical Bureau supports the rapid growth of gross domestic product (GDP) in the first quarter, improving the provisional indicator both year-on-year and quarter-on-quarter by 0.1 percentage points. Thus, in the first quarter of the year, GDP has grown1.1% quarter-on-quarter (instead of the previously estimated 1.0%), whereas year-on-year, i.e. within one year,  GDP has grown by 6.9% (instead of the previously estimated 6.8%).

The strategy aimed to resolve the debt crisis by gradually decreasing budget deficits and debts is implemented against a background of hot debates ("economic and political suicide" or "the only solution without a real alternative"), which find a variety of echoes in Latvia as well. Lately, a discussion on the impact of fiscal consolidation on economic growth has been reinforced?.