During the first half of 2020, the Latvian economy shrank by 5.4 percent year-on-year amid the ongoing COVID-19 pandemic, according to the data released by the national statistics office on Monday, Trend reports citing Xinhua.
Updated statistics showed that in the second quarter(Q2) of this year the Baltic country's economic downturn was less severe than initially thought.
A flash estimate published by the statistics office at the end of July put the GDP reduction in Q2 at 9.8 percent, while revised data revealed that the downturn was 0.9 percentage points smaller.
In Q2 2020, household spending fell by 20.9 percent year-on-year as unemployment spiked and people's income dwindled due to the COVID-19 crisis.
COVID-19 restrictions in Latvia's export markets and disruptions of supply chains affected Latvia's exports, which dropped 12.5 percent from Q2 2019, while investment declined at a relatively moderate rate.
Commenting on the latest statistics, the Latvian Economics Ministry noted that practically all sectors of the economy were affected by the COVID-19 crisis in Q2, especially hospitality and catering services providers, as well as arts, entertainment and recreation.
However, most recent positive trends in manufacturing, retail trade growth recorded in June and July, a drop in unemployment during the summer months, as well as improving business confidence across most sectors indicated that the hardest phase of the crisis is already over, the ministry said.
If the epidemiological situation does not get significantly worse, Latvia's economic downturn this year might stay within 4 to 5 percent, the ministry added.