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Sunday 05.04.2020 | Name days: Vidaga, Aivija, Vija

Latvia’s GDP growth reportedly 2.2% in 2019

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Latvia, GDP, growth, statistics, CSPCompared to 2018, the economic growth continued and Gross Domestic Product (GDP) increased by 2.2 %. In 2019, GDP at current prices amounted to EUR 30.5 billion.

Compared to Q3, in Q4 2019 GDP at constant prices grew by 0.1 % (according to seasonally and calendar adjusted data).

In 2019, increase was registered in agriculture, forestry and fishing – of 12.8 %, which was mainly affected by production output rise in crop and livestock production – of 23.8 %, forestry and logging – of 5.9 %, but decrease was recorded in fishery. In 2019, weather conditions were very favourable for the development of crop production sector, which ensured highest harvested production of grain in Latvia’s history (3.2 million tonnes) and rise of crop production over the previous year of 46.4 %. Volume of livestock production fell by 1.1 % (prices of livestock production have risen by 3.9 % over a year).

Manufacturing went up by 2.1 % (rise was observed in ten out of 22 sectors). In the sector having the largest share in manufacturing – manufacture of wood and of products of wood – production output remained at the level of the previous year. Rise was recorded in manufacture of fabricated metal products (of 13.6 %), manufacture of computer, electronic and optical products (9.3 %), manufacture of electrical equipment (16.0 %), printing and reproduction of recorded media (7.5 %). But reduction was observed in manufacture of food products (of 0.8 %), manufacture of other non-metallic mineral products (2.1 %) and manufacture of furniture (2.8 %).

In electricity, gas, steam and air conditioning supply manufacturing volume fell by 4.4 %, of which in production and distribution of electricity – by 3.2 % and in steam and air conditioning supply there was a decrease of 10.3 %.

Construction production volume rose by 2.9 %. Over the year, construction of buildings grew by 7.8 %, civil engineering – by 1.0 %, and specialised construction activities by 0.2 %.

In 2019, retail trade increased by 2.4 %, of which retail trade in food products – by 1.1 %, but trade in non-food products – by 4.2 %. Wholesale trade, retail trade and repair of motor vehicles and motorcycles rose by 6.2 %, but wholesale – by 5.3 %.

In transport and storage sector decrease of 4.0 % was promoted by drop in freight transport by 6.0 %, fall in warehousing and support activities for transportation by 7.5 %, rise in passenger traffic by 7.7 %, increase in postal and courier activities by 17.8 %.

Accommodation and catering services grew by 8.0 %, of which accommodation – by 1.2 %, catering – by 11.2 %.

Information and communication services grew by 2.0 %, including rise of 9.1 % in computer programming and consulting. Information and communication services decreased by 0.3 %, and telecommunication services – by 5.8 %.

In 2019, financial and insurance activities fell by 8.8 %, which was mainly because of the decline in financial service activities of 10.9 % and drop in activities auxiliary to financial services and insurance activities of 17.8 %. Rise of 4.6 % in insurance, reinsurance and pension funding was ensured by drop in claims and prices. Decrease in financial service activities was enhanced by the increase of the other administrative expenses of monetary financial institutions (especially, expenses for information services and computer services, as well as for other services), as well as reduction of profit on transactions with financial instruments and decrease of commission income. In activities auxiliary to financial services and insurance activities reduced net turnover in other activities auxiliary to financial services, except insurance and pension funding and activities of insurance agents and brokers.. Also commission income of investment companies (manages 2nd and 3rd pension pillars) reduced.

Rise of volume of professional, scientific and technical activities of 7.5 % was promoted by increase in all sectors. Most significant growths in the largest sectors: head offices; management consultancy activities – by 17.4 %, advertising and market research – by 8.7 %, other professional, scientific and technical activities – by 8.0 %, legal and accounting activities – by 6.1 %, architectural and engineering activities; technical testing and analysis – by 4.3 %.

In 2019, administrative and support service activities went up by 6.5 %, which was facilitated by the significant rise in labour recruitment and provision of personnel sector (of 24.3 %) and growth of 6.6 % in services to buildings and landscape activities. But security and investigation activities experienced a drop of 3.9 %.

Increase of 5.8 % was registered in arts, entertainment and recreation sector, which was mainly affected by 7.9 % rise in gambling and betting activities.

In 2019 the volume of taxes on products (value added tax, excise and customs taxes) increased by 0.2 %.

In 2019, compared to the previous year, total household expenditure rose by 4.9 %. Expenditure on transport (public transport, purchase and exploitation of transport vehicles) rose by 9.6 %, and expenditure on recreation and culture went up by 6.9 %. Household expenditure on food went up by 0.9 %, while expenditure on housing rose by 2.0 %. The key expenditure groups form 57.8 % of the total household expenditure.

Government final consumption expenditure grew by 2.6 %.

Investment in the gross fixed capital formation grew by 3.1 %, of which by 2.8 % in dwellings and other buildings and structures and by 2.0 % in machinery and equipment, including transports equipment. Investment in intellectual property products (research, computer software, databases, copyrights, etc.) increased by 11.6 %.

Exports of goods and services rose by 2.0 %, of which exports of goods by 0.4 % and exports of services by 5.7 %. Exports mainly consisted of wood and products of wood and cork (except furniture) and electrical equipment and parts thereof. In 2019, an upturn was registered in exports of transport services, other economic activity (R&D services, professional and management consulting services, technical, trade-related and other business services), information and computer services. Downturn was recorded in exports of services related to tourism and financial intermediation services.

Imports of goods and services, in its turn, went up by 2.3 %, of which imports of goods by 2.2 % and imports of services by 2.7 %. Machinery, mechanical appliances, electrical machinery, transport vehicles and pharmaceutical products are the key imports commodities. Rise was registered in imports of transport, information and computer and other economic activity services. The value of imports of services related to tourism, telecommunication and financial services dropped.

In 2019, the total compensation of employees increased by 8.6 %, of which total wages and salaries – by 8.3 % and social security contributions of employers – by 9.9 %. The sharpest increase in compensation of employees was registered in construction – by 13.5 %, and information and communication services sector – by 9.8 %. Gross operating surplus and mixed income increased by 0.8 %, whereas the balance of taxes on production and imports and subsidies went up by 3.5 %.

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