GDP has grown by 4.8 % in 2021 and by 3.5 % in the 4th quarter
Data compiled by the Central Statistical Bureau (CSB) show that in 2021, as compared to 2020, Gross Domestic Product (GDP) increased by 4.8 %. Last year, GDP at current prices amounted to EUR 32.9 billion.
Compared to the 4th quarter of 2020, in the 4th quarter of 2021, GDP increased by 3.5 % according to seasonally and calendar non-adjusted data. Compared to the 3rd quarter, GDP at constant according to seasonally and calendar adjusted data decreased by 0.1 %. GDP at current prices amounted to EUR 9.0 billion in the 4th quarter.
* Revised as of the data of 1st quarter 2020
In 2021, GDP at current prices constituted EUR 32 916.6 million.
Production approach
(2021 compared to 2020, at constant prices)
In 2021, value added of producing sectors increased by 0.9 %, while growth in services sectors was more substantial at 6.2 %.
The agriculture, forestry and fishing sectors declined by 6.8 %, which was mainly affected by production output decline in all sub-sectors: by 8.0% in crop and livestock production, forestry and logging – by 4.9 %, and by 10.7 % in fishery.
Due to adverse weather conditions for the crop sector, a significant decrease (13.4 %) was registered in the summer of 2021. In spite of the increase in sown area, in 2021 for all cereal crops a decrease in total yield was registered. In turn, livestock production increased by 0.9 %. Both crop and livestock sectors experienced significant price increases in 2021, of 18.9 % and 5.5 % respectively.
The mining and quarrying sector performed well last year, with a 5.1 % increase in volumes. Sub-sectors showed diverging trends, with peat extraction and processing growing by 12.8 %, while gravel and sand quarrying a significant decline of 20.3 % was registered.
Manufacturing was one of the biggest contributors to the overall economy (up 0.8 percentage points) in 2021, growing by 7.4 %.%. 17 out of 22 manufacturing sub-sectors showed growth. The largest manufacturing sector by share (manufacture of wood and wood products) saw output growth of 3.7 %. Other important manufacturing industries also recorded significant increases: manufacture of chemicals and chemical products (25.6 %), manufacture of rubber and plastic products (11.2 %), manufacture of fabricated metal products (10.0 %), manufacture of non-metallic mineral products (4.4 %) and manufacture of computers, electronic and optical equipment. In turn, the second largest manufacturing industry, food products, declined by 0.5 %.
In electricity, gas supply, heat and air conditioning, output increased by 3.3 % (increases in all sub-sectors).
The value added of construction output declined by 6.1 % in 2021, affected by declines in all three sub-sectors. The construction of buildings decreased by 10,5 %, civil engineering construction by 5.0 % (including roads and railways by 6.0 %, construction of utility projects by 6.1 %; in turn, increase by 12.2% was registered in other civil engineering). Specialised construction activities decreased by 2.7 % (including demolition of buildings and site preparation by 22.0 %, electrical, plumbing and other construction installation activities by 2.4% and other specialised construction activities by 1.7 %).
Retail trade increased by 2.5 %, including a 4.1 % increase in non-food retail trade; in turn, 0.1 % decrease was registered in food retail trade. Wholesale and retail trade and repair of motor vehicles and motorcycles increased by 22.7 %, but wholesale trade, except of motor vehicles and motorcycles grew by 11.9 %.
The transportation and storage sector grew by 5.9 %, with a 8.9 % increase in the volume of services provided in storage and support activities for transportation, a 16.0 % increase in postal and courier activities and 1.0 % increase in land transport and transport via pipelines. Water transport activities had a negative impact on the sector, with a decrease of 8.3 %.
Restrictions introduced to improve the epidemiological situation and additional requirements on the activities of the sectors continued to have a negative impact on the performance of the accommodation and food and beverage services activities, with a decrease of 5.2 %. In 2021, the accommodation sector grew by 2.1 %, whereas the food and beverage services activities declined by 7.0 % over the year.
Value added in the information and communication industries increased by 11.1 %, including 14.3 % in computer programming activities and computer consultancy activities, 11.7 % in information service activities and 6.5 % in telecommunication activities.
In 2021, the growth of 20.6 % in the financial and insurance activities was driven by the strong performance of all sub-sectors. In financial service activities, the 26.0 % growth was driven by profit on transactions with financial instruments (as opposed to losses in 2020), as well as an increase in commission income of credit institutions and investment management companies. The 22.7 % growth in the insurance, reinsurance and pension funding was driven by an increase in contributions and a decrease in claims paid in private pension plans, as well as an increase in gross written premiums in life insurance. In financial services and insurance activities, the 2.5 % growth in activities auxiliary to financial services and insurance activities was driven by the strong performance of several groups of enterprises.
The 7.4% increase in professional, scientific and technical activities was driven by developments in legal and accounting activities (up 4.4 %), activities of head offices, business and other management consultancy activities (up 2.5 %), advertising and market research activities (up 35.8 %) and other professional, scientific and technical activities (up 4.7 %). In turn, architectural and engineering activities, technical testing and analysis had a negative impact on the development of the sector, with a 2.5 % decrease in the volume of services provided.
Administrative and support service activities grew by 0.7 %. The most significant increase was in the travel agency, tour operator and other reservation service and related activities (29.5 %). Rental and leasing activities also showed a positive development, up by 11.4 %. In turn, other activities declined during the year, with a decrease of 3.1 % in employment activities, 7.5 % in security and investigation activities, 2.4 % in services to buildings and landscape activities and 9.1 % in office administrative activities.
Arts, entertainment and recreation declined by 3.3 % compared to the previous year. The growth in library, archives and museum activities (up by 4.9 %) and sports activities and amusement and recreation activities (up by 3.8 %) could not compensate for the decline in activities in gambling and betting activities (down by 14.9 %) and creative, arts and entertainment activities (down by 0.8 %).
Product taxes (mainly value added tax, excise duties and customs duties) grew by 5.0 % in 2021, including a 7.3 % increase in value added tax revenues and a 2.2 % increase in excise duty revenues.
Expenditure approach
(2021 compared to 2020, at constant prices)
In 2021, the restrictions related to Covid-19 continued and two home ranges were introduced (in January and October 2021). Although the restrictions broadly affected a large part of the economy, the economy has been able to adapt to the restrictions.
In 2021, total household final consumption expenditure increased by 4.8 % compared to the previous year. Transport expenditure (public transport, purchase and operation of vehicles) increased by 9.2 %, accommodation and food services activities rose by 8.6%, although overall staying well below 2019 levels. Due to government restrictions, households cooked more meals at home, which contributed to a 1.2 % increase in spending on groceries. Households' spending on housing increased by 2.6 %, while households spent 2.7 % less on recreation and culture.
Government final consumption expenditure increased by 4.4 %.
Investment in gross fixed capital formation showed a slight positive trend, 3.0 % higher than in the previous year. Investment in dwellings, other buildings and structures decreased by 6.5 %. Investment in machinery and equipment (including transport equipment) increased by 13.7 %, while investment in intellectual property products increased by 17.8 %.
Exports of goods and services increased by 6.2 %. Exports of goods increased by 5.9 %, reaching their highest export value ever. The main export commodities last year were wood, wood products and charcoal; electrical and electronic equipment; machinery and mechanical appliances. Exports of services increased by 7.2 %. The most exported services were transport services and other business services. Travel-related services showed a decline, falling behind both 2020 and 2019 levels.
Imports of goods and services increased by 13.5 %. Imports rose by 12.3 %, reaching the highest level of all times. Imports were mainly electrical and electronic equipment; mineral products; machinery and mechanical appliances. Imports of services increased by 20.0 % and are already close to 2019 levels. Imports of services showed a significant increase, both in other business services and transport services. A decline was registered in travel-related services.
Income approach
(2021 compared to 2020, at current prices)
In 2021, total compensation of employees increased by 7.9 %, including an 8.3 % increase in total wages and a 6.3 % increase in employers' social contribution. The highest increase in total compensation of employees is in the public administration and defence, compulsory social insurance, education, health and social work group, up by 15.4 %, mainly due to wage increases in the health and social work group, and in the information and communication activities group, up by 12.6 %. Total compensation of employees in the service sectors increased by 4.3 %. Gross operating result and mixed income increased by 16.2 %, the balance between taxes on production and imports and subsidies increased by 15.4 %.
Possible changes in the government sector calculations, balance of payments and financial services sectors, as well as updated business services indices, will be taken into account in the GDP calculations and quarterly national accounts rebalancing on the 85th day after the reference quarter. The updated information will be available on the Oficial Statistics Portal on 26 March.
Time series of historical data and audit volumes for the main GDP indicators are available for download in GDP Metadata Section as Excel files.
For more information on GDP refer to “Gross domestic product - quarterly data” in the Government and Economy section of the Official Statistics Portal.
Methodological information
Calculations of quarterly data of the Gross Domestic Product (GDP) are made in line with the methodology of the European System of Accounts (ESA 2010), and the main data sources used in calculations are:
Surveys of quarterly and monthly enterprises and institutions;
Labour Force Survey; carried out by CSB;
Data from the Ministry of Finance, the Treasury and the State Revenue Service;
Data from the Bank of Latvia and the Financial and Capital Market Commission
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 respective 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 unit value 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.
COVID-19 crisis in time-series analysis area at the moment is considered as occurrence that is not seasonal, therefore, impact of crisis is not excluded from the data when carrying out seasonal adjustment. It must be taken into account that during the crisis both unadjusted and seasonally adjusted data may be potentially exposed to greater data revisions than they were in a pre-crisis period. Further information on seasonal adjustment during the COVID-19 crisis is available here
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 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
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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
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