Bank analysts forecast a minimal increase in Latvia’s GDP in the first quarter

Among them, Swedbank’s chief economist in Latvia, Līva Zorgenfreija, predicted that Latvia’s GDP could have increased by 0.3% in the first quarter of this year compared to the previous quarter, while compared to the first quarter of 2023, it could have remained almost unchanged, showing an increase of 0.1 %.

She explained that there is still a decline in the transit sector, as well as a likely decline in manufacturing at the beginning of the year. At the same time, there could have been an increase in retail trade and consumption of services, including “Swedbank” customer card data indicating an increase in spending.

Dainis Gašpuitis, macroeconomic expert of “SEB banka”, said that in the first quarter of 2024, compared to the fourth quarter of last year, the economy could have increased by 0.4%, while in the first quarter of this year, compared to the first quarter of 2023, the GDP could have increased by 0 ,2%.

“At the beginning of the year, the economic activity was relatively stiff. However, step by step, the activity was unevenly and slowly activated. This is evidenced by the indicators of the retail trade and manufacturing industry,” Gašpuitis said, while adding that it is difficult to assess how comprehensive these trends have been in the first months of the year.

At the same time, he mentioned that, to a large extent, the overall data will be significantly affected by construction performance, which had a significant impact last year, compensating for negative indicators in other sectors. The decline continued in transit industries.

On the other hand, Mārtiņš Āboliņš, the economist of “Citadele” bank, predicted that in the first quarter of 2024 compared to the previous quarter – the fourth quarter of 2023 – Latvia’s GDP could have increased by 0.1-0.5%, but this year in the first quarter compared to 2023. in the corresponding quarter of 2018, the economy could have decreased by 0.1% or increased by 0.3%

“According to my estimates, the first quarter of this year in the Latvian economy could have been a little better than the second half of last year,” said Āboliņš.

He pointed out that the fastest growth in the first quarter of this year could have been in the service sectors, which was related to the increase in the income of the population, the growth of exports and the increase in the state budget expenses in the public sector. Likewise, trade should be in the positive in March, while industry and logistics were likely still in decline, although positive signals have been visible in Latvian export markets in recent months.

Aboliņš added that the demand in industry in the Eurozone is starting to stabilize, stocks of finished goods are decreasing and businessmen’s mood is improving, so small pluses could appear in industry again in the second quarter. Also, a slight decline is possible in construction. Although public investment spending is growing this year, the rise in interest rates has had a negative impact on construction activity in the private sector.

The Central Bureau of Statistics will announce the data of the rapid assessment of Latvia’s GDP for the first quarter of 2024 on Monday, April 29.

It has already been announced that in 2023, Latvia’s GDP decreased by 0.3% compared to 2022.