RIGA, May 10 (Reuters) - Latvia's economy stumbled out of recession in the first quarter, with seasonally adjusted growth of 0.3 percent versus the previous three months being the first quarterly expansion for two years, data showed on Monday. A 6.0 percent drop year-on-year in the quarter was also less than expected. The Baltic region has suffered the worst economic falls in the European Union during the global crisis, led by Latvia's 18 percent output drop in 2009. The statistics office said in a statement that versus the fourth quarter, GDP dropped 19.2 percent on a non-seasonally adjusted basis, but seasonally adjusted it rose 0.3 percent. The last seasonally adjusted quarterly rise was in the fourth quarter of 2007 at 0.1 percent. The annual gross domestic decline in the first quarter was was much less than the 16.9 percent fall of the previous three months and compared with the median forecast in a Reuters survey for fall of 7.1 percent. The statistics office said the year-on-year drop was caused by a fall in all sectors, except industry, which rose by 9.6 percent in the first quarter. "Current economic activity indicators, including business confidence indicators, allow us to conclude that the Latvian economy will also continue to grow slowly in the coming quarters," said Zigurds Vaikulis, analyst at Parex Asset Management. "In that case we can say that the long sought for lowest point of the economy has finally been found," he wrote in a note, adding that he stuck to his forecast for the economy to contract as a whole by 2.5 to 3 percent this year. (Reporting by Aija Braslina; Editing by Toby Chopra) Keywords: LATVIA ECONOMY/ (Riga newsroom, email@example.com, +371 26 596 553) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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