In Q2 2016, as compared to Q1, gross domestic product at constant prices, according to seasonally and calendar adjusted data, increased by 0.6%. In Q2 this year, as compared to the corresponding period of 2015, GDP grew by 0.8% according to seasonally and calendar adjusted data and by 2.1%.
In Q2, GDP at current prices amounted to EUR 6.3 billion, whereas at constant prices – to EUR 5.4 billion.
Compared to Q2 2015, the manufacturing sector grew by 7.2% in Q2 2016. Growth was recorded in all of the largest manufacturing sub-sectors: in manufacture of wood and of products of wood – of 11%, in manufacture of food products – of 1%, in manufacture of fabricated metal products – of 19%, in manufacture of other non-metallic mineral products – of 8%, in manufacture of computer, electronic and optical products – of 26%, and in repair and installation of machinery and equipment – of 13%. In turn, a drop in industrial production output was recorded in manufacture of chemicals and chemical products (of 5%) and in manufacture of electrical equipment (of 4%), according to data from the Central Statistical Bureau of Latvia.
In Q2 2016, as compared to the corresponding quarter of the previous year, the construction production volume decreased by 19%. Construction volume dropped by 10% in the segment of non-residential buildings (a share of 42% of the total construction production volume), whereas the construction of residential buildings indicated growth of 10% (a share of 18%). The largest drop (of 34%) was observed in the construction of civil engineering structures (a share of 40 % of the total construction production volume), including the construction of harbours, dams and other water works – of 49%, construction of bridges and tunnels – of 41%, as well as in the construction of highways, streets and roads, airfield runways, and railways – of 33%. In turn, growth was recorded in the construction of main pipelines, communication and electricity lines – of 34%, as well as in the construction of local pipelines and cables – of 13%.
The 0.1% drop in the value added of the manufacturing sector did not have a significant impact on the overall GDP growth rate.
The value added in service sectors grew by 1.7%, having a positive impact on GDP growth in the amount of 1.1% percentage points.
Retail trade grew by 3% in Q2 2016, of which retail trade in food products – by 0.1%, and retail trade in non-food products – by 5%. Wholesale increased by 8% during the respective period.
In Q2 2016, as compared to Q2 2015, the transportation and storage sector grew by 3%. Passenger transport decreased by 1% and freight transport dropped by 2%, whereas growth was recorded in postal and courier activities – of 11%, as well as in warehousing and support activities for transportation – of 8%.
The volume of entertainment and recreation services increased by 4%, including growth of 3% in the gambling and betting sector, as well as an increase of 10% in creative, arts and entertainment activities.
GDP growth was facilitated by taxes on products, which grew by 8% in Q2 2016 in comparison to the corresponding period of the previous year, forming 1 percentage point of total GDP growth.
In Q2 2016, final consumption expenditure rose by 3 %. That was facilitated by a 4% increase in private final consumption, where household expenditure on food grew by 5%, expenditure on transport (expenditure on public transport, purchase and exploitation of transport vehicles) – by 9%, on recreation and culture – by 5%, whereas expenditure on housing decreased by 0.4%. Final consumption of households was affected by both the drop in prices (mostly on transport and housing), as well as the increase in the income of households. Government final consumption has remained at the level of the previous year.
Gross fixed capital formation decreased rapidly already for the second quarter in a row, which dropped by 26% in Q2 2016, as compared to the corresponding period of 2015. A drop was recorded in all of the fixed capital groups: investment in equipment and machinery decreased by 17%, in intellectual property – by 29%, whereas in dwellings and other buildings and structures – by 33%. In Q2 2016, the most amount of money was invested in the transportation and storage sector (17% of the total investments) and in the public administration and defence, compulsory social security sector (14%), which was still 38% and 40% less than a year before, respectively. Investments in the electricity, gas, steam and air conditioning supply sector grew by 24%.
In Q2, exports of goods and services have grown by 4%, whereas imports – by 7%. The growth in exports had a positive impact on GDP in the amount of 2.2 percentage points, whereas imports decreased the total GDP by 4 percentage points.