OREANDA-NEWS. August 14, 2009. Preliminary data on the Latvian GDP of Quarter 2 show that the economic situation has changed significantly. In Quarter 1 the GDP decreased by 18% if compared with the same period last year, but in Quarter 2 – by 19.6%. However, comparative seasonal data of Quarter 2 accounting for 18,2 % are even slightly better than at the beginning of this year, reported the Official website mk.gov.lv.

At least, the situation is not as dramatic as expected by some experts (-22-28%) which expressed too pessimistic forecasts on the development of the Latvian national economy and compared the situation with the big economic downturn in Lithuania. Monthly data already showed that in the main industries the data are quite similar to those at the beginning of this year. Better performance was observed in production and transport; lower results were achieved in domestic trade.

Most likely, the downturn was also increased by the so-called shadow economy which is one of the main explanations for the sharp downturn since the middle of last year.

In general, it is possible to conclude that in the first half of this year the GDP could decrease by about 18% and in the next quarters the situation will become more positive though a number of serious economic problems will remain. Therefore, Latvia has already overcome the statistically deepest downturn. A number of disincentives for the economic downturn have appeared, but turnover in some exporting industries and in transit are even increasing. Now the Government should focus on fostering economic activity and gradual resumption of economic growth; another important task is drafting of the 2010 budget which should be a firm base for the recovery of the Latvian economy and for re-establishing interest of foreign investors in Latvia. I am convinced that the economic indicators will already improve next year.