Ilustratīvs attēls
These two crises for the economy had completely different origins but it nevertheless makes sense to draw some comparisons – and now, after about a year and a half – we finally have a good handful of GDP data for this purpose.
With the lockdown taking place in March 2020, we can say that the fourth quarter of 2019 was the last “normal”, i.e. non-corona quarter, for the Latvian economy. I have recalibrated quarterly data for Latvian GDP to let 2019 Q4 = 100, see Figure 1.
Figure 1: Latvian GDP, quarterly data, 2015 Q1 – 2021 Q2; 2019 Q4 = 100
Source: Official statistics portal of Latvia and own calculations
Following the lockdown in March 2020 the economy took a nosedive and at the end of the 2nd quarter of 2020, i.e. just some four month after the lockdown, GDP had dropped by almost 10%, see again Figure 1, and shaved away all GDP growth since 2017 Q2. A super-sharp but also very short downturn since the economy started growing again in the 3rd quarter of 2020 and, with the recent flash estimate for GDP for 2021 Q2, the economy is now larger (just a tad…) than before corona and is set to grow further.
