Flash Comment: Latvia - February 9, 2012: GDP growth slowed in the fourth quarter of 2011

1. Flash comment
Economic commentary by Economic Research Department February 9, 2012
Latvia: GDP growth slowed in the fourth quarter of 2011
but still strong
GDP real growth, % According to the flash estimate by the Latvian Central Statistical
Bureau, seasonally adjusted GDP increased by 0.8% in the
15 fourth quarter of 2011 compared to the previous quarter. The
quarterly growth decelerated from 1.4% in the third quarter of 2011.
10
Soft beginning of winter hindered heat production thus industrial
5
output decreased by 0.5% in quarterly terms. However,
0 manufacturing growth was robust and even accelerated somewhat,
-5 to 1.9% in the fourth quarter from 1.5% in the third quarter. The fall
in retail trade by 0.8% suggests that households were cautious on
-10
consumption despite quite stable optimism.
-15
In annual terms, economic growth decelerated to 5% in the fourth
-20
2007 2008 2009 2010 2011
quarter from 6.6% in the third quarter (not seasonally adjusted).
Quarterly (sa) Annual (nsa)
Thus GDP increased by about 5.2% in 2011.
Source: CSBL
GDP and economic sentiment index Outlook
120 20%
Our GDP growth forecast is 2% for this year. Slower growth in
15%
the main trading-partner countries will cut into Latvian exports,
110 10%
uncertainty and stress in the financial markets will hurt investments,
5% and weaker confidence will weigh on consumption.
100
0%
-5%
90
-10%
80 -15%
-20%
70 -25%
2006 2007 2008 2009 2010 2011 2012
ESI, points Annual GDP growth (rs)
Source: CSBL, DG ECFIN
Dainis Stikuts
Senior Economist
+ 371 6744 5844
dainis.stikuts@swedbank.lv
Swedbank Economic Research Department Flash comment is published as a service to our customers. We believe that we have used
reliable sources and methods in the preparation of the analyses reported in this publication.
SE-105 34 Stockholm, Sweden
However, we cannot guarantee the accuracy or completeness of the report and cannot be
ek.sekr@swedbank.com
held responsible for any error or omission in the underlying material or its use. Readers are
www.swedbank.com
encouraged to base any (investment) decisions on other material as well. Neither
Swedbank nor its employees may be held responsible for losses or damages, direct or
Legally responsible publisher
indirect, owing to any errors or omissions in Flash comment.
Cecilia Hermansson, +46 8 5859 7720