Latvia Plunges Hard As 4th Quarter GDP Contracts by 10.5% On Year

Central Statistical Bureau of Latvia reports the flash estimate of GDP for the 4th quarter of 2008 today:

In the 4^th quarter of 2008, compared to the same period of 2007, gross domestic product (GDP) value has decreased by 10.5%, according to flash estimate of the Central Statistical Bureau.

In the 4^th quarter of 2008 decline of economic development continued both in fields of manufacturing and of services. Volume of manufacturing has decreased by 11.3%, of retail trade – by 15.6%, of hotels and restaurants services – by 24.8%. Also the value of collected product taxes has dropped significantly.

At the same time the data for consumer price level in January 2009 is reported as follows:

Compared to December 2008 the average consumer price level in January 2009 rose by 2.2%. The average prices of goods rose by 2.1%, but of services - by 2.3%.

Compared to January of previous year, consumer prices have increased by 9.8%, of which prices for goods increased by 8.9%, but for services – by 12.2%.

The annual average rate of change in January 2009 was 14.9%.

Chart (click to enlarge) courtesy of Nordea Analytics.

Here are flash notes by Danske Markets on GDP and inflation!
Lars Christensen and Violeta Klyviene of Danske Markets write in the note:

It is notable that the drop in GDP in Latvia is now of a similar size as the crisis in Argentina in 2001-02, Turkey in 2001 and South East Asia in 1997-98 – and much worse than during the Nordic banking crisis of the 1990s.