In the 2nd quarter, GDP has increased by 0.5 %30.08.2024

Data compiled by the Central Statistical Bureau (CSB) shows that in the 2nd quarter of 2024, compared to the 2nd quarter of 2023, gross domestic product (GDP) rose by 0.5 % (according to seasonally and calendar non-adjusted data at constant prices). As compared to the previous quarter, GDP went down by 0.9 % (according to seasonally and calendar adjusted data at constant prices).

In the 2nd quarter GDP at current prices was EUR 10.4 billion.

Production approach

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

In the 2nd quarter of 2024, as compared to the corresponding period of the previous year, as services sectors rose by 0.5 %, but producing sectors fell by 1.4 %, total value added has dropped by 0.1 %.

According to provisional data and assessments made, a rise in agriculture sector was estimated at 7.1 %, which was affected by increase in crop production (of 12.6 %) and drop in livestock production (of 1.4 %). Decrease was observed in fishery (of 16.0 %), as well as in forestry and logging sector (0.4 %).

As a result of various external and internal influencing factors, a prolonged period of recession (drop in volume for the eight consequent quarter) was observed in manufacturing, which has decreased by 2.3%. It was affected by fall in the largest manufacturing sector - manufacture of wood and of products of wood - by 0.8 %. Decrease was also observed in manufacture of fabricated metal products (of 7.0 %) and manufacture of computer, electronic and optical products (11.2 %). In turn, manufacturing was positively affected by an increase in its second largest sector - manufacture of food products (of 2.0 %). Manufacturing volumes have also gone up in manufacture of chemicals and chemical products (of 12.2 %) and manufacture of other non-metallic products (5.1 %). Overall, 9 out of 22 manufacturing sectors showed positive results.

Drop in the production volume of other industry sectors comprised 2.5 %. Group of sectors was negatively affected by the drop in electricity, gas, steam and air conditioning supply (of 7.6 %), while, as the demand increased, there was a positive result in mining and quarrying (rise of 12.6 %). A rise of 3.6 % was observed in water supply; sewerage, waste management and remediation activities.

After a sharp rise in production volume last year, in the second quarter of this year construction production volume decreased by 1.5 %, which was affected by a low demand in construction of buildings (drop of 15.8 %). The rise in volume of civil engineering work (of 18.6 %) was affected by increases in construction of utility projects (50.3 %), construction of roads and railways (1.6 %), as well as a decrease in other civil engineering projects n.e.c. (2.2 %). The volume of specialized construction activities fell by 1.5 %.

There was a drop in trade of 0.9 %, which was affected by a fall in trade and repair of motor vehicles and motorcycles of 7.6 %. An upturn in retail trade (of 0.4 %) was comprised by the rise in retail sale of non-food products (of 1.2 %) and by the fall in retail sale of food products (2.3 %). The volume of motor fuel sold increased by 3.8%. Wholesale remained at the level of the previous year.

Transport and storage sector (drop of 7.8%) was negatively affected by a drop of 7.5 % in land and pipeline transport activity, of 29.2 % in water transport sector, of 9.7 % in warehousing and support activities for transportation, of 1.7 % in postal and courier activities. In turn positive contribution was reached by growth in air transport sector (by 13.4 %).

Rise in this quarter is observed in accommodation and catering sector. Provision of services increased by 2.9 %, but overall growth of the sector was slowed down by a decline in catering of 0.5 %.

In information and communication sector there was a rise of 5.6 %. This was promoted by a growth in computer programming and consulting (of 4.5 %) and information services (18.9 %). On the other hand, provision of telecommunication services showed negative results this quarter (of 1.9%).

Fall in financial and insurance activities of 8.2 % was promoted by a drop in financial service activities (of 9.9 %), which was affected by the increase in costs of monetary financial institutions, and activities auxiliary to financial services and insurance activities (by 8.3 %). The rise in insurance, reinsurance and pension funding comprised 0.4 %.

Drop in volume of professional, scientific and technical activities of 1.4 % was affected by reduction of activity in provision of advertising and market research by 23.4 % and provision of veterinary services by 3.6 %. In turn positive contribution to the development of the sector was ensured by growth in legal and accounting activities (of 4.4 %), activities of head offices, management consultancy activities and advertising and market research (2.8 %), provision of architectural and engineering activities; technical testing and analysis (5.0 %), as well as development of scientific research work (1.3 %).

Administrative and support service activities have shown steady growth over a longer period of time, and this quarter, the volume of services provided has risen by 3.5 %. The rise in the volume of building maintenance and provision of landscape architectural services (9.2 %), as well as labour recruitment and provision of personnel (4.5 %), contributed positively to the sector's development. A drop in security and investigation activities comprised 15.1 %, but the volume of rental and leasing services fell by 7.1 %.

Rise of 1.9 % on taxes on products (mainly value added tax, excise and customs taxes) was determined by growth in income from value added tax.

Expenditure approach

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

In the 2nd quarter of 2024, compared to the corresponding period of the previous year, total household expenditure increased by 0.5 %. Household expenditure on purchase of food products has gone down by 1.3 % and expenditure on housing, water, electricity, gas and other fuels by 0.6 %. Expenditure on recreation and culture has risen by 1.1 %, as well as on purchase of clothing and footwear by 6.8 %.

Government final consumption expenditure grew by 8.5 %.

Investment in gross fixed capital formation fell by 5.7 %, of which in dwellings and other buildings and structures by 1.5 %, in machinery and equipment (of which in transport vehicles) by 9.5 %. Investment in intellectual property products (research, computer software, databases, copyrights, etc.) - reduced by 8.8 %.

Exports of goods and services fell by 3.4 %, of which exports of goods by 2.4 %, and exports of services by 6.0 %. The main commodities in exports were wood and products of wood (except furniture), electrical machinery and equipment, as well as mineral products. In the 2nd 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 2.9 %, of which imports of goods by 1.8 %, but imports of services by 7.5 %. 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)

In the 2nd quarter of 2024, compared to the 2nd quarter of 2023, compensation of employees increased by 8.9 %, of which total wages and salaries by 8.9 % and employers' social security contributions by 8.8 %. Compensation of employees in manufacturing sectors has risen by 3.3 %: the most rapid it has been in water supply, sewerage, waste management and remediation activities (of 12.9 %), mining and quarrying (7.7 %). Compensation of employees in construction rose by 3.3 %.

Compensation of employees in services sectors rose by 10.2 %. It has increased significantly in public administration and defence, compulsory social security (by 19.9%), education (16.9%), human health and social work activities (10.8%) and real estate activities (11.8%).

Gross operating surplus and mixed income decreased by 6.1 %, the balance of taxes on production and imports and subsidies went up by 13.4 %.

GDP data benchmark revision is expected, which will include a revision of the entire GDP time-series starting with the data on 1995 and integration of 2022 GDP estimate, which was calculated using data sources of annual periodicity into quarterly GDP time-series. The updated information will be available on official statistics portal on September 30.

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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Quarterly National Accounts Section
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