RIGA, Aug 29 (LETA) - In the first half of 2025, Latvia's seasonally and calendar non-adjusted gross domestic product (GDP) increased by 0.7 percent in constant prices and according to seasonally and calendar non-adjusted data against the same period a year ago, the Central Statistical Bureau (CSB) informed Friday.

In the second quarter, GDP rose 1.7 percent year-on-year.

In the second quarter of this year against the previous quarter, Latvia's GDP rose 0.4 percent according to seasonally and calendar non-adjusted data.

At current prices, GDP stood at 10.5 billion euro in the second quarter of this year and EUR 19.7 billion in the first half of this year.

Manufacturing, along with construction, trade, as well as information and communication, had a significant impact on the overall value added growth in the second quarter of 2025. A decline in electricity, gas, steam and air conditioning supply as well as transportation and storage partially offset the increase.

In the second quarter of 2025, value added overall increased by 1.8 percent year-on-year. Value added in producing sectors increased by 2.4 percent, while in services sectors it went up by 1.6 percent.

Growth in the agricultural sector was estimated at 1.5 percent. Fishery saw a decline of 0.1 percent, while forestry and logging - of 8.5 percent.

The overall reduction in mining and quarrying (down by 18.7 percent) was largely driven by drop in the extraction of peat (15.6 percent) as well as quarrying of stone and sand (28 percent).

Due to a growth in 13 out of 22 manufacturing sub-sectors, value added in manufacturing increased by 4.3 percent. Recession was recorded in manufacture of fabricated metal products (down by 2.1 percent), as well as manufacture of computer, electronic and optical products (down by 1.5 percent). In the manufacture of food products, value added went up by 8 percent, while in the sub-sector having the largest share in manufacturing - manufacture of wood and of products of wood - it rose by 3.5 percent. Upturn in the manufacture of other non-metallic products (of 15.8 percent) had a positive effect on the value added of the sector overall. Manufacture of chemicals and chemical products saw a decline of 10.8 percent. Output in manufacturing increased by 4.1 percent.

In electricity, gas, steam and air conditioning supply, output rose by 0.1 percent, but in water supply, sewerage, waste collection, treatment and disposal activities; materials recovery it fell by 5.6 percent.

Value added of the construction sector increased by 4.5 percent in the second quarter of 2025. Construction of buildings fell by 2.8 percent year-on-year, civil engineering rose by 27.7 percent, and specialized construction activities dropped by 0.1 percent.

Value added of the retail trade sector reduced by 0.4 percent, with retail sale of non-food products growing by 1.1 percent, but retail sale of food products declining by 2.1 percent. Wholesale and retail trade and repair of motor vehicles and motorcycles increased by 24 percent, while wholesale saw an increase of 0.3 percent.

Output of accommodation and food service activities went up by 3.4 percent, of which in accommodation by 5.8 percent and in food service activities by 2.2 percent.

Value added of the information and communication sector saw a growth of 3.7 percent, with a rise of 6.8 percent in computer programming, consultancy and related activities and of 8.6 percent in telecommunication, both of which are the largest sub-sectors of information and communication. Decline, however, was recorded in information service activities (down by 13.5 percent).

Driven by upturn in all sub-sectors, value added of the financial and insurance activities increased by 4.6 percent. Financial service activities saw a growth of 1.6 percent. Higher earned premiums in non-life insurance were the key factor behind the rise in insurance, reinsurance and pension funding (14.9 percent). Underpinned by the successful performance of several enterprise groups, value added of the activities auxiliary to financial services and insurance activities grew by 9.9 percent.

The 0.2 percent rise in value added of the professional, scientific and technical activities was largely attributable to increased provision of architectural and engineering activities; technical testing and analysis (up by 13 percent) as well as provision of advertising and market research (up by 3.3 percent). However, a decline of 9.3 percent in other professional, scientific and technical activities and of 6.5 percent in activities of head offices, advertising and market research had counterbalancing effect on the sector.

Value added of the administrative and support service activities fell by 1.2 percent overall. A rise in employment activities (up by 5.6 percent) and services of building and landscape activities (up by 3.1 percent) contributed positively to the sector’s value added. While a drop in security and investigation activities (down by 1.1 percent), rental and leasing activities (down by 3 percent), as well as office administrative, office support and other business support activities (down by 2.1 percent) contributed negatively.

The 1.8 percent rise in taxes on products (mainly value added tax, excise and customs duties) was driven by higher revenue from value added tax.

In the second quarter of 2025, household final consumption reduced by 0.2 percent year-on-year. Expenditure on food products fell by 2.1 percent, and expenditure on housing, water, electricity, gas and other fuels dropped by 1.2 percent. Household expenditure on restaurants and hotels increased by 3.5 percent. Transport costs (public transport, as well as acquisition, operation and maintenance of transport vehicles) rose by 3.7 percent.

Government final consumption expenditure grew by 2 percent.

Investment in gross fixed capital formation went up by 8.6 percent overall. Investment in dwellings and other buildings and structures rose by 7.1 percent, and investment in machinery and equipment (including in transport vehicles) grew by 13.9 percent. Investment in intellectual property products (research, computer software, databases, copyrights, etc.) went up by 0.2 percent.

Exports of goods and services increased by 2.3 percent, of which goods went up by 1.7 percent and services by 3.5 percent. In the second quarter of 2025, 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 diverse 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 7.1 percent, with goods up by 6 percent and services up by 11.4 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.

In the second quarter of 2025, compensation of employees increased by 6.3 percent year-on-year, of which wages and salaries went up by 6.1 percent and employer’s social contributions grew by 7.3 percent.

The largest growth in compensation of employees was recorded in arts, entertainment and recreation; and other service activities (8.8 percent in total), followed by construction (8.5 percent), as well as professional, scientific and technical activities; and administrative and support service activities (8.1 percent). Compensation of employees rose by an average of 5.3 percent in production sectors and an average of 6.9 percent in services sectors.

Gross operating surplus and mixed income increased by 1.8 percent, while the balance between taxes on production and imports and subsidies went up by 5.9 percent.