RIGA, May 29 (LETA) - In the first quarter of 2026, Latvia's seasonally and calendar non-adjusted gross domestic product (GDP) at constant prices grew by 2.5 percent compared to the same period of 2025, the Central Statistical Bureau informed LETA.

Latvia's seasonally and calendar-adjusted GDP also increased by 2.5 percent in the first quarter of 2026 compared to the corresponding period of 2025.

In the first quarter of this year, Latvia's GDP in constant prices increased by 0.6 percent on a seasonally and calendar-adjusted basis compared with the previous quarter - the fourth quarter of 2025.

In the first quarter of 2026, Latvia's GDP in current prices was EUR 9.856 billion.

According to the CSB, in the first quarter of this year, the largest contribution to value added growth came not only from the electricity, gas, heating and air conditioning sectors, but also from trade and real estate operations. Meanwhile, a decline in transportation and storage as well as agriculture, forestry and fishing partially offset the increase.

Compared with the first quarter of 2025, value added overall increased by 2.1 percent. Value added in producing sectors increased by 4.1 percent, and in services sectors it went up by 1.4 percent.

The agricultural sector recorded an increase of 1.3 percent. In the fisheries sector, value added fell by 0.2 percent and in the forestry and logging sector by 4.5 percent.

A 27.7 percent downturn in mining and quarrying was largely driven by a drop in the quarrying of stone, sand and clay as well as extraction of peat due to adverse weather conditions.

Due to a growth in 13 out of 22 manufacturing sub-sectors, value added in manufacturing increased by 1.1 percent. In terms of value added of the sub-sectors having the largest share in manufacturing, manufacture of wood and of products of wood recorded a decline of 2.5 percent, while manufacture of food products an increase of 6.3 percent. An upturn in manufacture of other non-metallic products (up by 1.4 percent) and manufacture of fabricated metal products, except machinery and equipment (up by 19.4 percent) had a positive influence on the sector, while manufacture of beverages had a counterbalancing effect (down by 32.8 percent).

Low temperatures in January and February contributed to higher value added of electricity, gas, steam and air conditioning supply (up by 41.6 percent). Value added of water supply, sewerage, waste collection, treatment and disposal activities; materials recovery also went up (by 3.5 percent).

Value added of the construction sector increased by 2.8 percent. Civil engineering was the main contributor to the growth of the sector, with value added increasing by 4.3 percent due to the expansion of infrastructure projects, such as roads, bridges and power supply. Value added of construction of buildings increased by 4.3 percent, whereas value added of specialized construction activities dropped by 0.3 percent.

Value added of the retail trade sector rose by 6.6 percent.

Wholesale and retail trade; repair of motor vehicles and motorcycles rose by 0.4 percent, while wholesale trade, except of motor vehicles and motorcycles, saw an increase of 6 percent.

The volume of services provided in accommodation and food service activities saw a decline of 1.8 percent, of which accommodation fell 2.1 percent and food service activities by 1.6 percent.

Value added of the information and communication sector saw a decline of 2.4 percent, with a rise of 1.8 percent in computer programming, consultancy and related activities and a drop of 2.3 percent in telecommunication, both of which are its largest sub-sectors. Information service activities recorded a reduction of 16.8 percent.

Driven by a 16.4 percent downturn in activities auxiliary to financial services and insurance activities, value added of financial and insurance activities reduced by 1.0 percent. However, financial service activities saw a growth of 0.8 percent, while insurance, reinsurance and pension funding of 5.5 percent. Downturn in the auxiliary activities was driven by activities auxiliary to financial services, except insurance and pension funding, by activities of insurance agents and brokers, as well as by investment management companies.

The 7.1 percent rise in value added of professional, scientific and technical activities was largely attributable to increased provision of architectural and engineering activities; technical testing and analysis (up by 9.9 percent), other professional, scientific and technical activities (up by 8.7 percent), advertising and market research (up by 7.7 percent), as well as legal and accounting activities (up by 6.4 percent).

Value added of administrative and support service activities rose by 6.9 percent overall. A rise in employment activities (up by 11.0 percent) and office administrative, office support and other business support activities (up by 33.7 percent) contributed positively to the value added of the sector. While a 5.2 percent drop in security and investigation activities contributed negatively.

The 5.7 percent rise in taxes on products (mainly value added tax, excise and customs duties) was driven by higher revenue from value added tax. Of the overall GDP growth, 0.7 percentage points were attributable to taxes on products. At current prices, revenue from taxes on products increased by 9.1 percent.

Compared with the first quarter of 2025, household final consumption increased by 0.2 percent. Consumption of food products rose by 1.4 percent and consumption of items in the group of housing, water, electricity, gas and other fuels went up by 3.0 percent. Household expenditure on transport (public transport as well as acquisition, operation and maintenance of transport vehicles) grew by 6.2 percent.

Government final consumption expenditure reduced by 1.5 percent.

Investment in gross fixed capital formation went up by 3.2 percent overall. Investment in dwellings and other buildings and structures rose by 3.3 percent, and investment in machinery and equipment (including in transport vehicles) grew by 3.4 percent. Investment in intellectual property products (research, computer software, databases, copyrights, etc.) went up by 1.3 percent.

Exports of goods and services increased by 1.4 percent, of which goods went up by 1.4 percent and services by 1.7 percent. In the first quarter of 2026, the main commodities in export were wood and products of wood (except furniture), electrical machinery and equipment, as well as mineral products. The main services in export were transport services and other business services (this category includes, among others, services in the areas of research and development (R&D), professional and management consultancy, technical and trade-related services and other services to businesses).

Imports of goods and services rose by 3 percent, with goods going up by 5.1 percent and services down by 4.8 percent. The main commodities in import were mineral products, electrical machinery and equipment, as well as vehicles other than railway or tramway rolling stock, and parts and accessories thereof. The main services in import were transport services and other business services.

According to the CSB, compared with the first quarter of 2025, compensation of employees increased by 5.5 percent, of which wages and salaries went up by 5.7 percent and employer's social contributions grew by 4.8 percent.

The largest growth in compensation of employees was recorded in financial and insurance activities (11.1 percent), followed by construction (7.9 percent), as well as professional, scientific and technical activities (7.4 percent). Compensation of employees rose by an average of 5.9 percent in production sectors and an average of 6.2 percent in services sectors.

Gross operating surplus and mixed income increased by 4 percent, while the balance between taxes on production and imports and subsidies went up by 12 percent.