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Finance Ministry: exports of goods reached a new record in October

The volume of exports continued growing in November, reaching EUR 1,070,600 at the end of the month and setting a new record for exports for one month’s time. This export index is the highest in the history of statistical records in Latvia, Finance Ministry stated in its report, commenting on data from the Central Statistical Bureau.

It is concluded in the report that the total volume of exports in actual prices exceeded October’s level by 3.5%, reaching 9.7% in November. Unlike the month before, when export growth was based mainly on re-exports of mechanisms and electrical appliances, export growth structure in October was more varied.

It should be mentioned that the biggest increase among all groups of goods has been noticed for metals and their products – 43.3% in total when compared with last year’s period. This can be explained with increase of exports of iron and scrap metals to Turkey and multiple EU member states, as well as the increase of iron and steel constructions to Scandinavian countries. It should be noted that metals represent one of the most rapidly growing groups of export products in 2017. Exports of metals grew by 23.1% in the first nine months of 2017.

The second largest increase was noted for wood and wooden products – exports grew 18.8% this year. This was mostly thanks to export growth to EU member states. In spite of a rather rapid climb in October, export growth was moderate in the first ten months of the year – 6.2% when compared with the same period of the previous year.

The ministry estimates that exports of wood are rather fluctuant this year, which was because of decline of exports to Britain. Still the decline was compensated by export increase to Germany, Estonia, Sweden and, to a lesser degree, to other EU member states. Positive development of wood exports was secured thanks to products with high added value – plywood sheets, particle board, carpentry goods, etc.

At the same time, Finance Ministry mentions in its analysis that although agriculture and food products’ exports in October were 4.4% higher than last year, this was largely thanks to alcoholic beverages. This group of goods demonstrated high growth rates – 55% each month when compared with the same month last year. Growth was large based on strong alcohol exports to Russia.

Export growth has also been noted for oilseeds, meat and vegetables. A 36.2% decline of grains was noted for grains. Export value of grains was EUR 58.9 million, which more or less fits last year’s average value. Nevertheless, exports of grains did reach the highest peak (EUR 92.3 million) in October 2016. Considering the weak harvest Latvia has had this year, exports turned out significantly lower in October 2017.

In addition, exports of pharmaceutical products, polygraph products, textile materials and mineral products continued growing in October.

Looking at future perspectives for exports, it is expected that exports of goods will remain equal in the last months of 2017. Mood indexes of European consumers and businessmen are at the highest peak they’ve been on in the past decade, which points to increase of economic activity. Looking at the first three quarters of 2017, EU’s economic growth is expected to be one of the fastest in the last ten years, Latvian Finance Ministry explains.

The mood index for Latvian producers has also reached its peak since the middle of 2007. Data for the last quarter of 2017 shows that the volume of expected export orders and competitiveness positions on the EU market will likely improve somewhat closer to the end of the year.

The ministry mentions that the optimistic expectations for new orders and high production output could restore stagnant investments in processing industry, which is needed for raising export potential. It should be noted that the volume of non-financial investments in the national economy has grown by 19.2% in three quarters of 2017 when compared with the same period of 2016. Investments in processing industry have decreased by 7.4%.

The ministry also notes that the decline of investments in processing industry was also noted in 2016 (by 25.4%). It is the processing industry that influences Latvia’s exports the most. With that, growing external demand may be one of the factors that could stimulate investments in the production sector. Otherwise the lack of investments could create a situation with growing external demand and inability of producers to increase production volumes.


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