RISP2401
GDP in 2023 reduced by 0.3 % and in the 4th quarter – rose by 0.1 %
Data compiled by the Central Statistical Bureau (CSB) show that in 2023, as compared to 2022, Gross Domestic Product (GDP) decreased by 0.3 %. In 2023, GDP at current prices amounted to EUR 40.3 billion.
Compared to the 4th quarter of 2022, in the 4th quarter of 2023, GDP increased by 0.1 % (according to seasonally and calendar unadjusted data). Compared to the 3rd quarter, GDP at constant prices increased by 0.8 % (according to seasonally and calendar adjusted data). In the 4th quarter GDP at current prices was EUR 10.7 billion.
* Revised starting with the data on Q1 2022
Production approach
(2023 compared to 2022, at constant prices)
In 2023 value added of producing sectors reduced by 1.4 %, but in services sector – increased by 0.8 %.
Decrease was registered in volume of agriculture, forestry and fishing – of 8.1 %, which was affected by production output drop in crop and livestock production (of 7.8 %) and forestry and logging (9.2 %), but rise was observed in fishery (2.2 %).
A reduction in peat extraction and processing of 19.9 %, as well as drop in quarrying of gravel and sand of 18.9 % affected the overall manufacturing volume drop in mining by 19.5 %.
After a long-term positive contribution to growth of the overall economic development, manufacturing has shown a reduction of 5.2 % and caused the largest negative impact (-0.7 percentage points) on the total value added. A drop was indicated by 15 out of 22 manufacturing sub-sectors. In the sub-sector having the largest share in manufacturing – manufacture of wood and of products of wood – production output decreased by 8.4 %. A recession is also observed in manufacture of fabricated metal products (of 6.2 %), manufacture of other non-metallic products (16.8 %), manufacture of furniture (20.8 %), as well as in manufacture of pharmaceutical products and preparations. Growth in manufacture of food products (of 4.0%), manufacture of electrical equipment (12.4 %), manufacture of computer, electronic and optical products (15.3 %) had a positive effect on the total value added of the sector.
In electricity, gas, steam and air conditioning supply manufacturing volumes fell by 0.8 %.
After several years of negative trends, the added value of construction production increased by 18.6 % in 2023 and was the main positively influencing factor in GDP development (+0.8 percentage points). Over the year, construction of buildings rose by 26.8 %, civil engineering – by 10.8 % (of which construction of utility projects – by 36.7 %, other civil engineering n.e.c. – by 35.7 %, but construction of roads and railways decreased – by 2.7 %). During the year volume of specialized construction activities rose by 17.8 %, of which demolition and site preparation – by 19.7 %, electrical, plumbing and other construction installation activities – by 21.0 %, building completion – by 9.5 %, but other specialized activities – by 18.9 %.
Retail trade reduced by 2.5 %, of which trade in non-food products – by 1.8 %, but trade in food products – by 3.8 %. Wholesale trade, retail trade and repair of motor vehicles and motorcycles rose by 11.1 %, but in wholesale a drop was observed – of 11.3 %.
All sub-sectors of the transport and storage sector showed negative upturn in 2023, except of air transport (growth of 25.9 %). In land and pipeline transport activity there was a drop of 5.2 %, in water transport sector activities – of 11.9 %, in warehousing and support activities for transportation – of 13.7 %, in postal and courier activities – of 3.0 %. In general, the added value of the transport and storage sector decreased by 7.8 %.
Volume of services provided in accommodation and catering services increased by 7.4 %, of which accommodation experienced a rise of 1.5 % and catering services– of 9.4 %.
In 2023 information and communication sector experienced an increase of 3.0 %, of which in the largest sub-sectors: computer programming and consultancy sector – of 9.7 % and provision of information services – of 7.0 %. A decrease is observed in telecommunication services (of 9.9 %).
Increase in financial and insurance activities comprised 2.6 %. Rise of 15.0 % in insurance, reinsurance and pension funding was determined by increase in gross premiums written in non-life insurance and increase in contributions in private pension plans made by members of pension plans (3rd pension pillar). Upturn in financial and insurance activities of 6.4 % was affected by such activities as securities operations and financial market management. In turn, in financial service activities there was a drop of 1.2 %.
It should be noted that the value added of banks at current prices has increased significantly – by 55.3 %, however, this increase has occurred at the expense of upturn in prices of services provided (for example, raising interest rates on bank loans).
Volume of professional, scientific and technical activities has reduced by 1.0 % in 2023. Development of the sector was promoted by rise in activities of head offices, management consultancy activities and advertising and market research (of 8.1 %), architectural and engineering services, technical testing and analysis (12.7 %), provision of other professional, scientific and technical activities (2.6 %). In turn, negative impact on the development of sector was left by drop in provision of legal and accounting activities (drop of 2.0 %) and provision of advertising and market research (22.7 %).
Rise of administrative and support service activities of 5.4 % was promoted by positive development in rental and leasing services sector of 4.1 % and building maintenance and provision of landscape architectural services of 36.7 %. The sector was negatively affected by drop in labour recruitment and provision of personnel – by 11.3 %, in security and investigation activities – by 2.3 % and in office administrative activities – by 2.4 %.
The successful activity of arts, entertainment and recreation contributed to the growth of the sector by 11.7 %, compared to the previous year. Development of the sector was positively promoted by an increase in creative and arts activities of 17.8 %, in sports activities, entertainment and recreation activities – of 12.6 %, as well as in gambling and betting activities – of 8.3 %.
In 2023 the volume of taxes on products (mainly value added tax, excise and customs taxes) decreased by 5.1 %.
Expenditure approach
(2023 compared to 2022, at constant prices)
In 2023, compared to the previous year, total household expenditure decreased by 1.0 %. Volume of food products consumed purchased both in retail sale and in e-environment decreased by 3.4 %. The use of housing-related goods and services (expenditure on housing, water, electricity, gas and other fuels) decreased by 7.3 %. Use of transport by households (public transport, purchase and exploitation of transport vehicle) increased by 6.3 %.
Government final consumption expenditure grew by 7.0 %.
Investment in gross fixed capital formation rose by 8.2 %, of which in dwellings, other buildings and structures it has grown by 18.9 %, which was mainly affected by the low base effect in 2022. Investment in machinery and equipment (of which in transport vehicles) reduced by 0.3 %, in intellectual property products (research, computer software, databases, copyrights, etc.) – by 0.8 %.
Exports of goods and services fell by 5.9 %, of which exports of goods by 7.1 %, but exports of services – by 2.6 %. The main commodities in exports were wood and products of wood (except furniture), machinery and mechanical appliances as well as electrical machinery and equipment. In 2023, the main services exported were exports of transport services and other economic activity (R&D, professional and management consulting, technical, trade-related and other business services).
Imports of goods and services reduced by 2.9 %, of which imports of goods volume by 3.9 %, but imports of services increased – by 2.5 %. Mainly, mineral products, electrical machinery and equipment, vehicles and associated transport equipment were imported. Main imports services: transport services and other economic activity services.
Income approach
(2023 compared to 2022, at current prices)
Compared to 2022, in 2023 compensation of employees increased by 12.7 %, of which total wages and salaries rose by 12.8 %, but employers' social security contributions by 12.1 %.
The largest growth in total compensation of employees was in agriculture, forestry and fishing sector (of 22.3 %); in the sector group of wholesale, retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities altogether (14.1 %) and information and communication sector (14.0 %). Compensation of employees in services sectors has risen on average by 12.9 %.
Gross operating surplus and mixed income decreased by 4.6 %, the balance of taxes on production and imports and subsidies went up by 7.8 %.
Possible changes made by the government sector estimates, balance of payments and financial services sector, as well as updated services producer price indices will be taken into account in the GDP calculations and balancing of the quarterly national accounts on the 85th day after the reference quarter. The updated information will be available on official statistics portal on March 25.
Time series of historical data and revision values of main GDP indicators are available for download in Excel files in the OSP GDP metadata section.
More information on the GDP is available in official statistics portal section Economy Gross domestic product – quarterly data.
Methodological information
Calculations of quarterly data of the GDP are made in line with the methodology of the European System of Accounts (ESA 2010). Main data sources used in calculations are:
Surveys of quarterly and monthly enterprises and institutions;
Labour Force Survey data carried out by the CSB;
Data from the Ministry of Finance, the Treasury and the State Revenue Service;
Latvijas Banka;
Data from the Institute of Agricultural Resources and Economics.
The GDP statistics from production and expenditure approach is calculated at current prices (registration and calculations are made at the actual prices of the corresponding period) and constant prices. The indicators at constant prices are expressed at prices of the previous calendar year and prices of the reference year (chain-linked).
To calculate GDP at the prices of the previous calendar year the actual prices of the previous calendar year are used as a base and the ‘annual average’ method (where each running quarter (or year) is calculated at the average prices of the previous year) is used. To make the calculations, various deflators are used. Both volume indices and price indices may be used as deflators. The following price indices are used: consumer price index, producer price index, construction cost index, services producer price index, price indices of agricultural products, export unit value index, import price index. The following volume indices are used: change in number of employees and change in natural indicators (e.g., in removals, passenger number, etc.).
To calculate GDP at the prices of the reference (base) year (currently, prices of 2015) the indices calculated from the GDP indicators at the prices of the previous year are used to chain-link the calculated volume indices with 2015.
GDP from the income approach is calculated at current prices only.
The published data are adjusted in line with the Guidelines for CSB Revision Policy. The adjustments are made due to receipt of specified information as well as the latest administrative data, inclusion of new economically active enterprises and institutions in surveys, specification of economic activity of sector of enterprises.
Media requests:
Communication Section
E-mail: media@csp.gov.lv
Tel: +371 27880666
More information on quarterly data:
Gita Ķiņķevska
Quarterly National Accounts Section
E-mail: Gita.Kinkevska@csp.gov.lv
Phone: +371 67366791
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