Latvia's economy grew by 3.0% year on year in the second quarter of 2026, but the most interesting business signals are hidden beneath the headline GDP figure. GDP increased by 0.7% compared with the previous quarter, while growth for the first half of the year reached 2.8%.
IT is becoming one of the fastest-growing sectors
Value added in information and communication increased by 8.3%, while computer programming and consultancy expanded by 16.6%.
This is a significant signal for Latvia's technology sector as businesses increase investment in digitalisation, software, data and AI-related solutions.
Manufacturing and construction are contributing again
Manufacturing value added increased by 5.5%, with growth recorded in 16 of 22 subsectors. Fabricated metal products stood out with an increase of 18.6%.
Construction grew by 3.2%, while building construction expanded by 11.8%. Civil engineering, however, declined by 2.8%.
Exports and investment show stronger business activity
Exports of goods and services increased by 7.7%, with goods exports rising by 11.6%. Services exports declined by 0.9%.
Gross fixed capital formation grew by 6.5%. Investment in machinery and equipment, including vehicles, increased by 9.8%, while investment in intellectual property products such as software and research rose by 6.6%.
Household consumption is also improving
Household consumption increased by 3.7% in the second quarter, while retail value added rose by 5.8%. This reinforces recent retail data showing stronger consumer activity.
Which sectors are still struggling?
- forestry and logging – −7.1%;
- beverage manufacturing – −25.3%;
- accommodation and food services – −2.3%;
- transport and storage also recorded a decline;
- telecommunications services fell by 2.9%.
What do the Q2 figures mean for businesses?
Latvia's current growth is not being driven by a single industry. Manufacturing, IT, trade, investment and goods exports are all expanding at the same time. This is a broader growth pattern than one driven solely by government spending or one exceptional sector.
The most important Q2 signal is not simply GDP growth of 3%, but the combination of stronger equipment investment, double-digit goods export growth and rapid expansion in technology services.
The Central Statistical Bureau notes that a scheduled GDP data revision will be published on 30 September, meaning some historical figures may still be adjusted.
Comments
No comments yet. Yours could be the first!
Add a comment