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Monday 27.01.2020 | Name days: Ildze, Ilze, Izolde

Latvia’s gross domestic product increases 2.9% in October

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gross domestic product, statistics, Latvia, CSPCompared to Q3 2018, the gross domestic product (GDP) (seasonally and calendar non-adjusted data) increased by 2.9 % in Q3 2019. In Q3 GDP at current prices was EUR 8.1 billion.

As compared to the previous quarter, GDP, according to seasonally and calendar adjusted data rose by 0.7 %.

In Q3 2019, according to provisional calculations, there was a significant rise of 29.5 % in agriculture (mainly in crop production), but in forestry and logging and fishery there was a drop of 3.7 % and 18.7 %, according to data from the Central Statistical Bureau of Latvia.

In mining there was a decrease both in quarrying of sand and gravel of 21.2 % and in quarrying of peat – of 7.3 %.

Value added of manufacturing has grown by 4.1 %. It was promoted by the increase of production output in four largest manufacturing sectors: manufacture of fabricated metal products, manufacture of computer, electronic and optical products (of 21.3 %), production of building materials (of 2.5 %), manufacture of food products (of 0.9 %).

But decrease of 2.7 % was observed in manufacture of wood and of products of wood, which is the largest manufacturing sector. Also fall in manufacture of chemicals and chemical products of 6.9 %, manufacture of wearing apparel – of 6.7 %, manufacture of rubber and plastic products – of 5.0 % and manufacture of beverages – of 4.3 % left negative impact on the development of sector.

Construction production volume rose by 5.9 %. Growth of construction output was observed in almost all sectors: construction of buildings rose by 11.7 %, civil engineering – by 2.1 % (of which, increase of 3.0 % was observed in construction of roads and railways, of 24.0 % – in construction of other civil engineering projects, but construction of utility projects negatively affected development of sector – there was a drop of 4.6 %).

Specialised construction activities were carried out more by 2.4 % than last year.

Retail trade increased by 1.9 %, of which trade in food products – by 0.1 %, but trade in non-food products (including sale of automotive fuel at gas stations) – by 3.0 %. Wholesale and retail trade and repair of motor vehicles and motorcycles rose by 13.3 %, but wholesale trade – by 6.6 %.

In transport and storage sector decrease of 4.6 % was promoted by drop in freight transport by 5.4 %, fall in warehousing and support activities for transportation by 12.7 %, rise in passenger traffic by 7.3 %, increase in postal and courier activities by 23.8 %.

Volume of accommodation and catering services grew by 9.4 %, of which accommodation – of 5.3 %, but catering – increased by 11.3 %.

Development of information and communication services sector has decreased by 0.3 %, of which in telecommunication sector – by 9.0 %, but increase was observed in computer programming and consulting – of 2.8 % and in information services – of 6.2 %.

A drop of 14.3 % in financial and insurance activities affected all sectors: financial service activities reduced by 14.1 %, insurance, reinsurance and pension funding – by 12.7 %, but activities auxiliary to financial services and insurance activities – by 15.3 %. The largest impact on the fall of sector was left by reduction of the value added of monetary financial institutions which was determined by rapid growth of expenditure (mainly, commission expenses, other administrative expenses). Fall in insurance, reinsurance and pension funding was affected by increase of retirement capital paid in  private pension plan (3rd pillar), while in non-life insurance there was a slight rise.

Volume of professional, scientific and technical activities rose by 8.2 %, of which: activities of head offices; management consultancy activities – by 20.6 %, architectural, engineering, technical testing and analysis services – by 11.8 %, professional, scientific and technical activities – by 16.8 %, while drop of 2.3 % was observed in advertising and market research.

In Q3 2019 the volume of taxes on products (value added tax, excise and customs taxes) decreased by 0.4 %.

As purchasing power of households continued to increase, in Q3 2019 household expenses for final consumption, compared to the corresponding quarter of the previous year, rose by 5.1 %. Household expenditure on purchase of food products rose by 0.9 %, on transport (public transport, purchase and exploitation of transport vehicles) – by 9.6 %, expenditure on recreation and culture – by 6.9 %. Household expenditure on dwelling, which are made up by expenditure on rentals for housing, expenditure on maintenance and repair of the dwelling, water supply, electricity, gas and other fuels, rose by 3.1 %. These groups of expenditure are made up by 58 % of total household expenditure.

Government final consumption expenditure grew by 3.2 %.

Investment in gross fixed capital rose by 4.8 %. Investment in dwellings, other buildings and structures grew by 5.6 %. Investment in machinery and equipment (of which in transport vehicles) increased by 1.1 % and in intellectual property products (research, computer software, databases, copyrights, etc.) – by 17.4 %.

In Q3, exports of goods and services rose by 5.6 %, of which exports of goods (69 % of total exports) by 5.5 % and exports of services by 5.9 %.

Imports of goods and services grew by 1.0 %. Imports of goods, which comprises 84 % of total imports, has risen by 1.0 %, but imports of services – by 0.6 %.

Compared to Q32018, in Q3 2019 compensation of employees at current prices grew by 9.1 %, of which total wages and salaries – by 9.2 % and employers’ social security contributions – by 8.6%. The sharpest increase in compensation of employees was registered in construction – by 14.1 %, information and communication services – by 9.8 % and manufacturing – by 8.7 %.

Gross operating surplus and mixed income increased by 1.8 %, whereas the balance of taxes on production and imports and subsidies went up by 3.7 %.

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