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International Internet Magazine. Baltic States news & analytics Wednesday, 16.01.2019, 16:41

Latvia's exports in March decrease for the first time in 1.5 years

BC, Riga, 14.05.2018.Print version
After growing steadily for almost 18 months, Latvia's exports unexpectedly decreased in March by 6.1% year on year, Citadele economist Martins Abolins told LETA.

Although the fall in export volume is an unpleasant surprise, foreign trade figures may fluctuate widely, and exports in March were affected by several one-off factors, for instance, fewer workdays than in March 2017, therefore export figures for April should be better than in March, explained Abolins. At the same time, export volume in March may indicate that the potential of pleasant surprises regarding the economic development may be decreasing, and Latvia's economic growth this year could be slower than in 2017, he added.

One of the main reasons for the fall in export volume in March was the poor grain harvest last year, Abolins pointed out. In March, export of grain tumbled by more than 85% year on year. Export of vegetable oil and electrical equipment also decreased, by 90.7% and 8.7% respectively.

In the meantime, import of various equipment increased 17.3% in March, which means that investments are rising. Abolins believes that investments are necessary for continued export growth because limited production capacity may hinder further development of Latvia's exports.

However, favorable external economic environment is the main factor determining the development of Latvia's exports. While the first two months of the year were very good for international trade, producer sentiment in Europe has been declining for a few months now, and Europe's industrial growth has slowed down, explained Abolins.

Nevertheless, the overall picture does not necessarily suggest any negative trends in the global economy, rather the global economic growth is becoming more moderate. The possibility of different tariffs and sanctions among the world's leading economies poses the biggest threat to global trade, which would also affect businesses in Latvia.

As reported, in January-March this year, Latvia's exports value constituted EUR 2.86 billion - an increase of EUR 176.6 million or 6.6% on the first quarter of 2017, while the imports value was EUR 3.4 billion - up by EUR 168.1 million or 5.2%, according to the Central Statistical Bureau's data.

This past March, Latvia exported goods in the amount of EUR 966.2 million - 3.6% or EUR 33.5 million more than in in February, but 6.1% or EUR 62.8 million less than in March 2017. Import of goods amounted to EUR 1.22 billion - this is 12% or EUR 130.8 million more than in February and 0.2% or EUR 2.7 million more than in March 2017.

Compared to March 2017, foreign trade balance has worsened as exports in total foreign trade amount decreased from 45.8% to 44.2%.

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