Latvia’s economy expanded by 2.5% year-on-year in the first quarter of 2026, slowing from a 2.9% increase in the previous quarter. The deceleration was largely driven by weaker growth in manufacturing (1.1% vs 6.8%), construction (2.8% vs 10%), human health and social work activities (2.1% vs 4.4%), and arts, entertainment, and recreation (2.7% vs 3.3%).
Several sectors moved into contraction: accommodation and food services (-1.8% vs 0.4%), information and communication (-2.4% vs 7.4%), and public administration and defence (-0.9% vs 0.9%). Activity also fell further in transportation (-8.3% vs -5.7%).
By contrast, growth strengthened in trade (5.5% vs 2.6%), real estate activities (3.7% vs 0.5%), and other industries (21.6% vs 2.3%). On a seasonally adjusted quarterly basis, GDP rose by 0.6% in Q1, following an upwardly revised 0.7% increase in the previous quarter.
