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International Internet Magazine. Baltic States news & analytics Thursday, 18.04.2019, 19:55

Latvia`s GDP up by 4.8% in 2018 and by 5.1% in Q4

Gita Ķiņķevska, Quarterly National Accounts Section, 28.02.2019.Print version
Data compiled by the Central Statistical Bureau (CSB) show that in 2018 economic growth continued, as gross domestic product (GDP) increased by 4.8%, compared to 2017. Last year, GDP at current prices constituted EUR 29.5 bn.

Compared to the 3rd quarter, in the 4th quarter of 2018 GDP at constant prices increased by 1.2% (according to seasonally and calendar adjusted data).


GDP value and changes


 

Million euros, seasonally adjusted

Changes (%, at constant prices)

Period

at current prices

at constant prices of 2010

compared to the previous period, seasonally and calendar adjusted

compared to the corresponding period of the previous year, seasonally and calendar non-adjusted

2018

29 523.7

23 864.2

x

4.8

Q1*

6 389.3

5 223.7

1.5

4.0

Q2*

7 386.8

6 004.8

1.2

5.3

Q3*

7 766.8

6 201.5

1.6

4.5

Q4

7 980.8

6 434.1

1.2

5.1

* Revised data on Q1–Q3 2018.

 

In 2018, the sharpest GDP rise over the past seven years was recorded.


Production approach

(2018, compared to 2017, at constant prices)

In 2018, increase was registered in agriculture, forestry and fishing – of 3%. In agriculture, a drop of 12% was recorded, including a decline of 21% in crop production. Compared to the year before, harvested production of grain fell by 24%, which is the smallest harvested production of grain and the lowest average grain yield from one hectare recorded over the past years. Livestock production remained almost at the level recorded year before (drop of 0.3%). Forestry and logging rose by 21% over the year. Value added in fishery grew by 5%.


Manufacturing went up by 3%. Industrial output increased in three of the largest manufacturing sectors – manufacture of wood and of products of wood and cork, manufacture of fabricated metal products, except machinery and equipment, and manufacture of computer, electronic and optical products – by 5% in each. Rise was recorded also in other sectors – manufacture of electrical equipment (of 24%), manufacture of rubber and plastic products (10%), and manufacture of chemicals and chemical products (9%). Manufacture of food products reduced by 3%.


Other industry fell by 1%, which was due to the decline in production and transmission of electricity, as well as steam and air-conditioning supply of 6% that were not compensated by 4% rise in mining and quarrying.


Construction output increased by 22%. Over the year, construction of buildings grew by 26%, civil engineering by 12%, and specialised construction activities by 28%.

Sharp rise in the construction output registered during the past two years facilitated development of the real estate market resulting in the highest rise over the past five years.

Retail trade went up by 4%, of which retail trade in food products increased by 4% and retail trade in non-food products by 3%. Wholesale and retail trade and repair of motor vehicles and motorcycles rose by 6%.


Upturn in transportation and storage of 5% was facilitated by 15% rise in passenger transport. Transportation and storage sector indicates a growth of 2% while postal and courier activities of 18%. Freight transport increased by 5%.


Accommodation and food service activities went up by 5%, of which accommodation by 11% and catering by 3%.


Value added of information and communication at current prices reached EUR 1 billion already for the third year in a row, however such a high indicator at constant prices has been recorded for the first time.




Information and communication services increased by 13%, of which computer programming, consultancy and related activities by 15%, information service activities by 18%, and telecommunications by 12%.


In 2018, financial and insurance activities fell by 7%, which was mainly because of the decline in commission incomein all sub-sectors, especially in investment management companies and credit institutions. At the same time, rise was registered in services provided in insurance, reinsurance and pension funding, mainly because of the upturn in non-life insurance and private pension funding. The prices of services provided within the sector kept rising.


Professional, scientific and technical activities grew by 1%, of which architectural and engineering activities; technical testing and analysis by 19%, other professional, scientific and technical activities by 4%, while legal and accounting activities reduced by 4%.


In 2018, administrative and support service activities went up by 8%, which was facilitated by the 23% rise rental and leasing activities as well as employment activities. Notable downturn was recorded in security and investigation activities.

In 2018, the volume of taxes on products (value added tax, excise and customs taxes) increased by 8%.

 



Expenditure approach

Compared to the year before, in 2018 total household expenditure rose by 5%. Expenditure on transport (public transport, purchase and exploitation of transport vehicles) increased by 4% and expenditure on recreation and culture by 12%. Household expenditure on food went up by 6%, while expenditure on housing by 2%. The key expenditure groups form 61% of the total household expenditure.

Government final consumption expenditure grew by 4%.


Investment in the gross fixed capital formation increased by 16%, of which investments in dwellings and other buildings and structures by 23% and in machinery and equipment (incl. in vehicles) by 11%. Investment in intellectual property products (research, computer software, databases, copyrights, etc.) rose by 5%.


Exports of goods and services went up by 1%, of which exports of goods by 2% and exports of services by 1%. Wood and articles of wood (except furniture) as well as electrical machinery and equipment were main exports commodities. In 2018, an upturn was registered in the value of services related to tourism, as well as telecommunication, information and computer services. Exports of transport services stayed at the level recorded year before, while downturn was recorded in exports of financial and construction services.


After positive trends recorded in the two previous years, imports and exports balance was negative in 2018.

Imports of goods and services, in turn, rose by 5%, of which imports of goods by 4% and imports of services by 7%. Machinery and mechanical appliances as well as electrical machinery and equipment are the key imports commodities. Rise was registered in imports of transport and telecommunication services as well as information and computer services. The value of imports of services related to tourism stayed at the level registered year before, while imports of financial services dropped.




Income approach

In 2018, the total compensation of employees increased by 11%, of which total wages and salaries by 10% and social security contributions of employers by 15%. The sharpest rise was recorded in information and communication (of 20%) and construction (18%). Gross operating surplus and mixed income increased by 7% and balance of taxes on production and imports and subsidies by 11%.


Total wage and salary fund and changes thereof




GDP changes in the Baltic states
(at constant prices, seasonally and calendar non-adjusted, as % of the corresponding period of the previous year)







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