Latvia: Industrial output tumbles in January
March 3, 2014
In January, industrial production plummeted 11.0% over the same month last year, which was well below the 4.0% decrease observed in December. The reading represented the second consecutive decrease in industrial production and the sharpest contraction in over four years. The deterioration resulted from a strong decline in electricity and gas supply as well as in manufacturing production. The contraction in manufacturing output reflected an over 90.0% decrease in the manufacture of basic metals when Liepajas Metalurgs, the only producer of rolled steel in the three Baltic countries, halted production. The firm, which filed for bankruptcy in November of last year, is expected to be sold in the coming months after its creditors have given the green light on the sales plan. Sequential data confirm the deterioration suggested by the annual figures. Industrial production plunged a seasonally-adjusted 10.7% over the previous month in January. The reading came in well below the 1.4% drop observed in December and marked the sharpest contraction in over a decade. Meanwhile, the trend continues to point downward. Annual average variation in industrial production fell from minus 0.4% in December to minus 1.4% in January. FocusEconomics Consensus Forecast panelists expect industrial production to rebound in 2014 and expand 5.0%, which would mark a substantial improvement over the 0.4% contraction tallied in 2013. For 2015, the panel expects growth in industrial output to accelerate to 6.3%.
Author: Ricardo Aceves, Senior Economist