Latvia's calendar-adjusted industrial production grew 9.6% y/y in April, the Central Statistical Bureau (CSB) reported on June 5.

The gain marks the eighth positive monthly reading in a row following a hiccup in August; ten of the last twelve months have shown output growth. Maintaining the strong growth in output, the April reading - which was just 0.4pp below the expansion recorded in March - supports the view that the Latvian economy could in the process of shifting to a higher gear. Output in January-April grew 8.9% y/y.

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 20.7% y/y, while the manufacturing sector expanded 6.2%. In the utilities segment, output grew 18.8%.

Within the manufacturing sector, production of electrical equipment surged 31.9% y/y, while out in the segment of computer, electronic, and optical products output expanded 29.2% y/y. Manufacture of beverages and chemicals also grew over 25% y/y in April. Overall, out of 14 branches of manufacturing, eight saw output increase. 

In seasonally adjusted monthly terms industrial production declined 0.3%, with mining and quarrying growing 6.3% and utilities 0.4%, while manufacturing fell 0.9%.