Updated information of Gross Domestic Product (GDP) of Latvia in 2015 appeared to be a bit weaker than the forward estimates. Gains in Latvian economics for the last year in comparable prices made up 2.7%, while numerous banking experts expected after updating to get 2.8-3%.
In 2015, the volume of Latvian GDP in actual prices amounted to €24.376 billion. But the Ministry of Finance (the key responsible for the state budget execution) expected GDP at €24.56 billion.
Judging by the structure of Latvian economics, it leans on three pillars:
2) real estate transactions,
3) processing industry.
Their contribution to GDP of the country last year made up 13.9%, 12.5% and 12.2% accordingly. Over the year, the growth in these sectors made up 3.7%, 3% and 4.3%.
But on the other hand in two other large sectors — in construction (6.5% of GDP) and in transport including warehousing (9.5% of GDP) the things are progressing far less than smooth. A fall by 1.1% was observed in the first sector, but the second sector demonstrated a slight fall – just by 0.1%. The constructors can only hope that application of the EU funds would become more intense, but representatives of the transport sector - trust in improvement of the economic situation in Russia.
But also in the sectors more successful at large the picture looks like patchy. For example, the gain in processing industry rested on the achievements of woodworkers (+7%), of manufacturers of computers, electronic and optical equipment (+40%), as well as of furniture makers (+14%). The food industry is still in the process of adapting to new markets, new niches. Over the past year the volumes of actual production here dropped by 5%. Production of metal goods shrank by 4%.
Good achievements were demonstrated by the services sector. The hotel and restaurant services contribute a moderate share to GDP (1.9%). But last year they demonstrated a perceptible 6% gain. Partially it can be explained by Latvian presidency in the EU, accordingly, by a large inflow of guests within the framework of various events. The information and communication services build up their share in GDP. It attained 4.8%, but a gain in this segment made up 3.3%.
There is no point to cherish for local demand as the economic powerhouse. It is limited to paying capacities of population of Latvia and the paucity of its residents. Further development of national economics of Latvia is still linked with export capacities, therefore the major development risks are connected with the development of global economics.