FX.co ★ Latvia Q1 GDP Contracts at Softer Pace

In the first quarter of 2025, Latvia's economy saw a contraction of 0.3% compared to the same period the previous year, which is a slight improvement from the 0.4% decline experienced in the last quarter. This period marked the fourth consecutive decline in economic activity, though it was the smallest decrease within that timeframe. Notably, there was a significant rise in gross capital formation by 18.8% and a 2.2% increase in government spending. Conversely, household consumption saw a decline of 1.1%. When looking at net external demand, imports surged by 7.8%, outpacing the 2% rise in exports. On a quarter-on-quarter basis and adjusted for seasonal variations, the economy shrank by 0.1% in the first quarter of 2025, following a revised flat performance in the preceding three-month period.