Latvia: plummeting consumption drags down GDP
- GDP down by 8.9% YoY in Q2 2020, and by 5.4% in the first half of 2020
- Growth during crisis dragged down chiefly by private consumption
- Value added fell the most in catering and accommodation, arts and recreation and transport
The second reading of GDP figures was less pessimistic than the flash estimate. This was because the drop registered in taxes on products was less substantial than the CSB previously factored in.
Private consumption fell by a fifth in Q2 – dragged down by less spending on transport as well as recreational and cultural events.
With the virus in Latvia still under control, many indicators point to a sharp rebound in activity in the summer months. Therefore, we should see much of the ground lost in the first half of the year, recover in Q3.
Swedbank expects GDP to contract by 5% in 2020 and recover in 2021 and 2022 (growing 4.2% and 3.3% respectively), reaching pre-crisis levels at the start of 2022.
For more information please contact Ms. Līva Zorgenfreija, +371 67445875, firstname.lastname@example.org
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