Latvian Statistics Office reports that Latvian economy grew 3.6%/year in the 1st quarter of 2008. This is far worse that anyone predicted.
To put this into perspective, Latvian GDP in Q4 2007 was 8.1% bigger than in Q1 2007. So, we have 4.5% decrease from Q4 2007 to Q1 2008. Some of that is, of course, seasonal. The Christmas shopping season contributes to the economy in 4th quarter substantially, every year.
Unfortunately, our statistics office does not release seasonally adjusted numbers. So, I had to do a rough adjustment myself. In last 5 years on average, we have had 0.3% decrease in GDP from Q4 of one year to Q1 of the next. This should be compared with the average 9.5% year-on-year growth which translates to roughly 2.3% quarter-on-quarter on average throughout the year. So, the typical Q4-to-Q1 growth is 2.3%+0.3%=2.6% less than the average quarter-on-quarter.
Making that adjustment gives 4.5%-2.6%=1.9% quarter-on-quarter economic contraction which is still very bad.
Caveat #1: One should also adjust for different number of working days (Easter was in March this year and is in April most years) and even different number of days in Q1 (we had February 29 this year). And that gets too complicated for me to do it myself...
Caveat #2: this is the "quick estimate" which will be revised in a month. One quarter ago, Edward Hugh argued that "quick estimates" may be off in rapid turning points as this one. He was right: last quarter's "quick estimate" was 9.6%/year and the final one was 8%/year. Let's hope that the current estimate is off in the other direction. (After all, statistics office might have tried to avoid a mistake similar to last quarter and ended up overcorrecting in the other direction.)
But, in any case, we are clearly having a substantial economic contraction.