The Latvian economy grew at a stable rate in the first quarter of 2014, with real GDP increasing 0.7% quarter-on-quarter and 2.8% year-on-year. There were some positive surprises supporting growth, including stronger construction activity due to warm weather and strong performance in the transportation sector. However, weaker retail trade and industrial growth weighed on the overall economy. Annual inflation was 0.7% in April, reflecting moderate economic growth. The latest export data also showed the ability of Latvian exporters to quickly adapt to changes in external demand.