In the 1st quarter GDP has increased by 0.1 %

Data compiled by the Central Statistical Bureau (CSB) shows that in the 1st quarter of 2024, compared to the 1st quarter of 2023, gross domestic product (GDP) rose by 0.1 % (according to seasonally and calendar non-adjusted data at constant prices). As compared to the previous quarter, GDP went up by 0.9 % (according to seasonally and calendar adjusted data at constant prices).

In the 1st quarter GDP at constant prices was EUR 9.3 billion.

Production approach

(at constant prices, seasonally and calendar non-adjusted data)

In the 1st quarter of 2024, as compared to the corresponding period of the previous year, as services sectors remained at the level of the previous year, but producing sectors fell by 1.1 %, total value added has reduced by 0.2 %.

A rise in agriculture sector was estimated at 1.7 %, which was affected by increase in crop production (of 14.6 %) and drop in livestock production (of 2.5 %). Increase was observed in fishery (of 14.2 %), as well as in forestry and logging sector (4.8 %).

As a result of various external and internal influencing factors, a prolonged period of recession (drop in volume for the seventh consequent quarter) was observed in manufacturing, which has decreased by 5.3%. It was affected by fall in the largest manufacturing sector – manufacture of wood and of products of wood – by 1.5 %. Decrease was also observed in manufacture of fabricated metal products (of 11.5 %), manufacture of non-metallic mineral products (11.2 %), manufacture of electrical equipment (3.6 %), as well as manufacture of computer, electronic and optical products (16.8 %). In turn, manufacturing was positively affected by an increase in its second largest sector – manufacture of food products (of 1.8 %). Manufacturing volumes have also gone up in manufacture of chemicals and chemical products (of 9.2 %).

Rise in the production volume of other industry sectors (of 7.5 %) was affected by the increase in electricity, gas, steam and air conditioning supply (9.3 %) and mining and quarrying (15.2 %), as well as water supply; sewerage, waste management and remediation activities (1.8 %).

After a sharp rise in production volume last year, in the first quarter of this year construction production volume decreased by 5.5 %. Although two out of three construction sub-sectors show an increase in volumes, this did not offset the decline in building construction, where a 22.0 % decrease was observed due to the lack of new construction contracts. The rise in volume of civil engineering work (of 19.0 %) was affected by increases in construction of utility projects (35.2 %), construction of roads and railways (2.5 %), as well as a decrease in other civil engineering n.e.c.(4.0 %). The volume of specialized construction activities rose by 3.1 %.

There was a drop in trade of 1.7 %, which was affected by a fall in wholesale trade of 4.3 % and in trade and repair of motor vehicles and motorcycles of 3.7 %. An upturn in retail trade (of 1.0 %) was promoted by the rise in retail sale of food products and retail sale of non-food products – by 0.2 % and 1.5 %, respectively. The turnover of motor fuel increased by 4.8 %.

Transport and storage sector (drop of 9.0%) was negatively affected by a drop of 9.0 % in land and pipeline transport activity, of 24.0 % in water transport sector, of 11.0 % in warehousing and support activities for transportation, of 8.4 % in postal and courier activities. In turn positive contribution was reached by growth in air transport sector (by 37.0 %).

The accommodation and food services industry shows a decline this quarter. Volume of provision of services decreased both in catering and accommodation – by 1.0 % and 1.3 %, respectively.

In information and communication sector there was a drop of 3.2 %. This was driven by a drop in volume in provision of telecommunication services (by 1.4 %) and computer programming and consulting (4.7 %). On the other hand, provision of information services showed positive results this quarter (0.1 %).

Upturn in financial and insurance activities of 1.8 % was promoted by rise in insurance, reinsurance and pension funding and activities auxiliary to financial services and insurance activities (of 20.9 % and 12.2 %, respectively). There was a drop of 4.4 % in financial service activities. The positive results of insurance, reinsurance and pension funding were ensured by the increase in earned premiums in non-life insurance. Rise in activities auxiliary to financial services and insurance activities was determined by the successful activity of insurance agents and brokers and investment management companies.

Drop in volume of professional, scientific and technical activities of 6.7 % was affected by reduction of activity in provision of advertising and market research – by 27.4 %, legal and accounting activities – by 5.0 % and provision of veterinary services (4.6 %). In turn positive contribution to the development of the sector was reached by growth in activities of head offices, management consultancy activities and advertising and market research (of 0.6 %), provision of architectural and engineering activities; technical testing and analysis (2.3 %), as well as development of scientific research work (3.0 %).

Over a longer period of time administrative and support service activities show a steady growth and also this quarter the volume of services provided has risen by 4.3 %. Positive contribution to the development of the sector was provided by the rise in volume of rental and leasing services sector (of 1.0 %), building maintenance and provision of landscape architectural services (13.1 %), labour recruitment and provision of personnel (5.8 %), as well as travel agency, tour operator reservation services (44.4 %). A drop in security and investigation activities comprised 19.1 %.

Reduction of 4.3 % on taxes on products (mainly value added tax, excise and customs taxes) was determined by drop in income from value added tax.

Expenditure approach

(at constant prices, seasonally and calendar non-adjusted data)

In the 1st quarter of 2024, compared to the corresponding period of the previous year, household final consumption has increased by 0.7 %. Expenditure on food products purchased both in retail sale and in e-environment increased by 0.2 %. Household's expenditure on housing, water, electricity, gas and other fuels rose by 0.8 %. In turn, volume of expenditure on restaurants and hotels spent by households has reduced by 0.7 %.

Government final consumption expenditure grew by 8.2 %.

Investment in gross fixed capital formation in general fell by 9.3 %, which was significantly affected by the high base effect in the 1st quarter of the last year. Investment in dwellings and other buildings and structures fell by 5.5 %, in machinery and equipment (of which in transport vehicles) by 14.6 %. Investment in intellectual property products (research, computer software, databases, copyrights, etc.) – reduced by 9.0 %.

Exports of goods and services fell by 3.1 %, of which exports of goods by 1.1 %, but exports of services – by 7.4 %. The main commodities in exports were wood and products of wood (except furniture), electrical machinery and equipment, as well as mineral products.  In the 1st quarter of 2024, 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).

Imports of goods and services decreased by 6.4 %, of which imports of goods – by 5.7 %, but imports of services – by 9.2 %. Mainly, mineral products, electrical machinery and equipment, machinery and mechanical appliances, vehicles and associated transport equipment are being imported. Main imports services: transport services and other economic activity services.

Income approach

(at current prices, seasonally and calendar non-adjusted data)

Compared to the 1st quarter of 2023, in the 1st quarter of 2024 compensation of employees increased by 11.8 %, of which total wages and salaries by 10.7 % and employers' social security contributions by 16.8 %.

The largest growth in total compensation of employees was in the group of public administration and defence; compulsory social security, education, human health and social work activities (a total of 24.4 %); arts, entertainment and recreation, repair of household goods and other service activities (12.9 %) and in the sector group of wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities (11.4 %). Compensation of employees in services sectors has risen on average by 11.9 %.

Gross operating surplus and mixed income decreased by 13.2 %, the balance of taxes on production and imports and subsidies went up by 8.1 %.

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 June 21.

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.

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), thus excluding the effect of changes in prices during the certain period.

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.

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More information on quarterly data:
Gita Ķiņķevska
Quarterly National Accounts Section
E-mail: Gita.Kinkevska@csp.gov.lv
Phone: +371 67366791