Latvia: Industrial production loses steam in November
January 3, 2011
In November, industrial production rose 11.4% over the same month last year, which was well below the 21.6% expansion registered in October. The increase represented the seventh consecutive month of double-digit growth, and despite the slowdown observed this month, industrial output remains strong. The November deceleration was mainly driven by slower growth in the manufacturing sector (October: +25.6% year-on-year; November: +12.4% yoy), as well as in mining and quarrying (October: +18.0% yoy; November: +13.2 yoy). In contrast, electricity and gas supply accelerated compared to the previous month (October: +3.9% yoy; November: +6.9% yoy). A month-on-month assessment confirms the slower performance suggested by the annual figures, with industrial production slipping a seasonally adjusted 0.3%, which contrasted the 1.6% increase observed in October. Nevertheless, the trend continues to point to a healthy recovery in the industrial sector, with the annual average growth in industrial production rising from 11.0% in October to 12.1% in November, which marked the fastest clip in more than a decade. In a recent statement, Prime Minister Valdis Dombrovskis stated that the government expects the economy to expand 3.0% this year, after remaining flat in 2010.
Author: Ricardo Aceves, Senior Economist