Latvia’s GDP grows by 2.0% in 2022

Compared with 2021, the gross domestic product (GDP) increased by 2.0 % in 2022. Last year, GDP at current prices amounted to EUR 39.1 billion.
Compared with Q4 2021, GDP increased by 0.3% in Q4 2022. Compared to Q3, however, GDP at constant prices has remained unchanged (according to seasonally and calendar adjusted data). In Q4 GDP at current prices was EUR 10.7 billion.

Last year the added value of producing sectors went down by 1.1%, whereas in in the services sector it increased by 4.2 %,

according to data from the Central Statistical Bureau of Latvia (CSB).
Increase was registered in volume of agriculture, forestry and fishing – of 7.0%, which was affected by production output rise in crop and livestock production (of 2.5%) and forestry and logging (13.6%), but reduction was observed in fishery (2.6%).
Different development trend in breakdown by sub-sectors (growth in peat extraction and processing of 1.7% and drop in quarrying of gravel and sand of 8.9%) caused overall reduction in mining and quarrying of 0.5%.

Regular positive contribution to growth of the overall economic development (0.3 percentage points in 2022) was observed in manufacturing – increase of 2.7%.

Rise was indicated by 14 out of 22 manufacturing sub-sectors. In the sub-sectors having the largest share in manufacturing – manufacture of wood and of products of wood – production output fell by 1.0%, but in manufacture of food products – by 1.6%. Positive activity can be observed in other significant manufacturing sub-sectors: in manufacture of electrical equipment (increase of 8.6%), in manufacture of other non-metallic mineral products (rise of 5.3%), in manufacture of furniture (growth of 0.7%), in manufacture of fabricated metal products (increase of 0.5%), as well as in manufacture of pharmaceutical products and preparations.

In electricity, gas, steam and air conditioning supply manufacturing volumes fell by 14.3%, as significant drops in all sub-sectors.

The value added of construction output decreased by 11.3% in 2022, affected by the decline in all three sub-sectors in all four quarters of the year. During the year volumes of building construction reduced by 9.8%, civil engineering – by 13.1% (of which, construction of roads and railways – by 8.5% and construction of utility projects – by 17.3%, but other civil engineering projects n.e.c. – by 36.4%). During the year volume of specialized construction activities reduced by 11.3%, of which demolition and site preparation – by 26.9%, electrical, plumbing and other construction installation activities – by 7.8%, building completion – by 18.0%, but other specialized activities – by 7.8%.
Retail trade increased by 4.3%, of which trade in non-food products – by 6.5%, but trade in food products – by 0.5%. Wholesale trade, retail trade and repair of motor vehicles and motorcycles rose by 10.1%, but in wholesale a significant drop was observed – 18.7%.
Rise in transportation and storage sector (2.3%) was promoted by growth in warehousing and support activities for transportation of 3.5% and in water transport sector activities – increase of 17.1%. Development of the sector was negatively affected by drop of 2.8% in land and pipeline transport and of 6.2% in postal and courier activities.
Lifting of restrictions introduced in 2021 for the purpose of improving the epidemiological situation affected the result of activity of accommodation and food services industry – in 2022 there was a significant increase of 57.5%, moreover, such an increase was found in both sub-sectors (both in the provision of accommodation and food services).
In 2022 the most significant contribution (0.7 percentage points) on the growth of total value added was ensured by development of information and communication sector – rise of 14.0%, of which in the largest sub-sectors: in telecommunication services – by 17.3%, computer programming and consultancy sector – by 14.4% as well as provision of information services – by 8.7%.
In 2022, the decrease in financial and insurance activities in the amount of 3.1% was determined by the financial service activities and insurance, reinsurance and pension funding – reduction of 9.3% and 7.5%. In turn, there has been an increase of 26.1% in financial service activities and activities auxiliary to financial services and insurance activities, which was provided by other activities auxiliary to financial services, except insurance and pension funding, security and commodity contracts brokerage and activities of insurance agents and brokers.
Growth of 13.1% in professional, scientific and technical activities was promoted by growth in legal and accounting activities (22.9%), activities of head offices, management consultancy activities (15.1%) and advertising and market research (30.4%) and other professional, scientific and technical activities (12.9%). In turn, the development of the sector was negatively affected by architectural and engineering services, technical testing and analysis, where the volume of services provided decreased by 2.6%.
Significant rise of administrative and support service activities of 25.7% was promoted by positive development in all sub-sectors. The most significant growth was observed in travel agency, tour operator reservation services sub-sector (of 78.3%). Positive development was also observed in rental and leasing services sector – by 31.9%, in labour recruitment and provision of personnel – by 35.5%, in security and investigation activities – by 7.3%, in building maintenance and landscape architectural services – by 15.2%, in office administrative activities – by 17.0%.
The successful activity of arts, entertainment and recreation after the lifting of various types of epidemiological requirements contributed to the growth of the sector by 26.6%, as compared with the previous year. The most significant increase was in gambling and betting activities (by 60.6%) and in creative and arts activities (by 21.2%).
In 2022 the volume of taxes on products, which is mainly value added tax, excise and customs taxes, went down by 0.2%.