Latvia's calendar-adjusted industrial production grew 7.8% y/y in calendar adjusted terms in June, the Central Statistical Bureau (CSB) reported on August 3.

The gain marks the tenth positive monthly reading in a row following a hiccup in August. Eleven of the last twelve months have shown output growth.

Output in the first half of 2017 grew a calendar-adjusted 9% y/y. Even if the growth in June was 2.1pp slower than in May, the strong positive trend was maintained. That supports forecasts that the Latvian economy could be shifting to a higher gear.

Latvian GDP grew just 2% in 2016. In the second quarter, the economy expanded a seasonally-adjusted 4.8% y/y, a flash reading from the Central Statistical Bureau (CSB) showed on July 31. 

Driven by more robust demand for exports from the Eurozone, and a pick up in EU-funded investment projects, the Latvian economy is forecast to accelerate growth to 3.2% this year, the European Commission predicts. 

The annual industrial production growth was driven by expansion in the manufacturing and mining and quarrying sectors, which grew 10.1% y/y and 13.5% y/y in June, respectively. In the utilities segment, output declined 2.2%.

Within the manufacturing sector, most segments recorded annual production growth. Production of machinery and equipment surged 43.7% y/y, while production of motor vehicles, trailers and semi-trailers expanded 41.3% on the year. 

Manufacture of chemicals and chemical products also grew strongly at 39.2% y/y. Segments to see output decline were textiles, wood products, and repair and installation of machinery and equipment.
 
In seasonally adjusted monthly terms, industrial production fell 0.4%, although manufacturing grew 0.7% on the month. Output in mining and quarrying fell 3.3% m/m while there also was a fall in the utilities segment, at 4.2% m/m.