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RIGA - Latvia’s economy grew at a quicker pace in the third quarter than previously estimated as domestic consumption, industrial production and construction expanded, reports Bloomberg. Gross domestic product rose by a revised 6.6 percent from a year earlier, the Riga-based statistics office said. That compares with a previous estimate for a 5.7 percent expansion and is the fastest pace since the fourth quarter of 2007, when the economy expanded 10 percent.
GDP grew a seasonally adjusted 1.7 percent from the previous three months, the office said.
The Baltic country’s economy began to recover in the second half of 2010 after a debt-fueled property bubble burst, export markets closed and lending tightened, erasing almost a quarter of GDP. The government will have passed tax increases and spending cuts of about 17.8 percent when including next year’s budget since turning to a group led by the European Commission and the International Monetary Fund for a 7.5 billion euro bailout loan package in 2008. In the January-September 2011 period, Latvia’s GDP grew 5.4 percent from the corresponding period last year, reports Nozare.lv.
Growth in trade (up by 9.7 percent), manufacturing (by 9.3 percent), and transport and storage (by 9 percent) had a positive effect on GDP. Accommodation services saw a growth of 17 percent, whereas catering services of 21.6 percent. A notable increase was recorded also in construction, of 19.6 percent.
Professional and technical services increased 5.2 percent, travel agencies and tour operator services by 15.9 percent.
Compared to the third quarter of 2010 (at current prices), the private final consumption rose 11.5 percent in the third quarter of 2011. The most notable expenditures in the private final consumption were recorded in housing maintenance - a 13.7 percent increase, and food - 9.5 percent. Expenditures on gross capital formation grew by 30.2 percent, imports by 22.6 percent and exports by 18.3 percent, whereas government final consumption increased by 0.8 percent.
In the third quarter of 2011, purchasing volume in private final consumption (at constant prices) increased by 5.5 percent, compared to the respective period last year.
Expenditures on gross capital formation rose by 24.4 percent, government final consumption by 2.7 percent. The export of goods (71.6 percent of the total export) grew by 6.6 percent and the export of services by 20.5 percent. At the same time, the volume of import of goods (82.7 percent of the total import) increased by 17.7 percent, whilst the volume of import of services rose 16.4 percent.