GDP records fastest expansion since Q3 2023 in Q2

Economy returns to growth: GDP rebounded in the second quarter, expanding 1.7% year on year and contrasting the 0.3% contraction logged in the first quarter. As such, Q2’s figure was the best result since Q3 2023. On a seasonally adjusted quarter-on-quarter basis, economic growth accelerated moderately to 0.4% in Q2, from the previous period's 0.1%.

Domestic demand fuels economic recovery: The upturn reflected improvements in domestic demand compared to the previous period. Household spending declined at a more moderate pace of 0.3% year on year in Q2 compared to a 1.0% contraction in Q1. Moreover, fixed investment growth accelerated to 8.6% in Q2, following the 6.4% increase recorded in the prior quarter. Meanwhile, public consumption growth was the slowest since Q1 2025, expanding 2.0% (Q1: +2.2% yoy). On the external front, exports of goods and services growth hit an over two-year high of 2.3% in the second quarter, rebounding from the first quarter's 1.8% contraction. In addition, imports of goods and services growth sped up to 7.1% in Q2 (Q1: +4.0% yoy).

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Latvian investment projections for the next ten years from a panel of 9 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable investment forecast available for Latvian investment.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Latvian investment projections.

Want to get access to the full dataset of Latvian investment forecasts? Send an email to info@focus-economics.com.