Latvian industrial production accelerates growth in May

Latvian industrial production accelerates growth in May
By bne IntelliNews July 4, 2017

Latvia's calendar-adjusted industrial production grew 9.9% y/y in May, the Central Statistical Bureau (CSB) reported on July 4.

The gain marks the ninth positive monthly reading in a row following a hiccup in August; eleven of the last twelve months have shown output growth. Maintaining the trend, the May reading - which was 0.3pp above the expansion recorded in April - supports the view that the Latvian economy could be shifting to a higher gear. Output in January-May grew a calendar-adjusted 9.1% y/y.

Latvian GDP grew just 2% in 2016. However, driven by more robust demand for exports from the Eurozone, and a pick up in EU-funded investment projects, the Latvian economy is now forecast to accelerate growth to 3.2% this year, the European Commission predicts. Should the target be hit, it would likely represent the fastest growth in the Baltic states in 2017.

The annual industrial production growth was driven by expansion in all main categories. Mining and quarrying boomed 21.3% y/y, while the key manufacturing sector expanded 9.4%. In the utilities segment, output grew 9.8%.

Within the manufacturing sector, all but one segment recorded annual production growth. Production of electrical equipment surged 51.1% y/y, while output in machinery and equipment expanded 26.5% on the year. Manufacture of computer, electronic, and optical products grew 24.9% y/y. The only segment to see output decline was repair and installation of machinery and equipment, in which production fell 16.7%.
 
In seasonally adjusted monthly terms, industrial production grew 1.7%, with manufacturing growing 3.1%. Output in mining and quarrying fell 0.2% while there also was a fall in the utilities segment, at 2.6% m/m. 

Data

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