Latvia's calendar-adjusted industrial production growth accelerated to 12.9% y/y in calendar-adjusted terms in September, the Central Statistical Bureau (CSB) reported on November 3.
The gain marks the thirteenth positive monthly reading in a row and has added 0.8pp to the very strong reading of 12.1% y/y in August, supporting forecasts that the Latvian economy is shifting to a higher gear in 2017.
Latvian GDP grew just 2% in 2016. In the third quarter, the economic growth accelerated to a seasonally-adjusted 6.2% y/y, according to a flash estimate from October 30.
The Latvian economy is forecast to accelerate growth to 3.2% this year, the European Commission predicts in a conservative estimate, given recent performance of the key sector. Fitch forecasts growth of 4.1% in 2017.
The growth in the third quarter likely came on the back of gains in investment and household consumption, as well as exports responding to demand from the Eurozone, although the details will be clear at the end of this month.
The annual industrial production growth in September was driven by robust expansion in the main segments of manufacturing, mining and quarrying, and electricity and gas supply. Output in manufacturing grew 7.1% y/y and in mining and quarrying, it jumped 22.8% y/y in September. In the utilities segment, output boomed 38.2%.
Within the manufacturing sector, all but three segments recorded annual production growth. Manufacture of motor vehicles, trailers, and semi-trailers surged 50.9% y/y, while production of machinery and equipment grew 27.1% y/y and of chemicals and chemical products 24.5% in annual terms.
In seasonally adjusted monthly terms, industrial production grew 1.4%, with growth in manufacturing contracting 1.3%. Output in mining and quarrying grew 1.7% and in the utilities segment production expanded 25.8%.