Latvian GDP fell back by 0.4% last year / Article

Last year GDP at current prices amounted to EUR 40.2 billion.

Compared to the 4th quarter of 2023, in the 4th quarter of 2024, GDP decreased by 0.4 % (according to seasonally and calendar unadjusted data). Compared to the 3rd quarter, GDP at constant prices increased by 0.1 % (according to seasonally and calendar adjusted data). In the 4th quarter GDP at current prices was EUR 11.0 billion.

In 2024, the value added of producing sectors reduced by 2.8 %, but in the services sector increased by 0.4 %.

Increase was registered in volume of agriculture, forestry and fishing – of 3.7 %, which was affected by production output increase in crop and livestock production (of 3.0 %) and forestry and logging (4.6 %), but reduction was observed in fishery (0.8 %).

Manufacturing witnessed a drop of 4.6 %, which was affected by the reduction in 11 out of 22 manufacturing sub-sectors. In the sub-sector having the largest share in manufacturing – production – output in manufacture of wood and of products of wood remained at the level of the previous year. 

Retail trade rose by 0.9 %, of which retail sale of non-food products by 2.3 %, but retail sale of food products reduced by 1.7 %. Wholesale trade, retail trade and repair of motor vehicles and motorcycles increased by 3.8 % and wholesale trade – by 0.1 %.

All sub-sectors of the transport and storage sector showed a negative trend in 2024, except for air transport (growth of 14.0 %). In land and pipeline transport activity there was a drop of 7.8 %, in the water transport sector activities – of 12.7 %, in warehousing and support activities for transportation – of 9.5 %, in postal and courier activities – of 6.5 %. In general, the added value of the transport and storage sector decreased by 7.9 %.

In 2024 total household expenditure increased by 0.6 % compared to the previous year. 

Exports of goods and services fell by 1.7 %, of which exports of goods by 1.3 %, but exports of services – by 2.7 %. The main commodities in exports were wood and products of wood (except furniture), mineral products and electrical machinery and equipment. In 2024, the main services exported were exports of transport services and other economic activity (R&D, professional and management consulting, technical, trade-related and other business).

Imports of goods and services reduced by 2.4 %, of which imports of goods volume by 1.6 %, but imports – by 5.8 %. Mainly, mineral products, electrical machinery and equipment, vehicles and associated transport equipment are imported. Main imports services: transport services and other economic activity services.

In 2024 the compensation of employees increased by 7.7 %, of which total wages and salaries rose by 7.6 %, but employers’ social security contributions by 8.5 %.

Commenting on the data, theMinistry of Finance said “The economic downturn in 2024 was mainly determined by low economic growth in the world and in Latvia’s main foreign trade partners, where the pace of development is still being slowed down by both the war started by Russia in Ukraine and the subsequent increase in prices, as well as still-high interest rates.”

In 2025, according to the Ministry of Finance’s updated macroeconomic indicators forecasts in early February, economic growth will recover, with GDP growth reaching 1.2%, but will still be relatively low, taking into account both the slow economic development in the main trading partner countries and the growing uncertainty and security risks that limit consumption and private investment activity. Additional risks are also created by the potential trade tariff wars initiated by the United States, the ministry said.

Tell us about a mistake