Like in September, in October the processing industry showed good achievements, but export of commodities continued shrinking. In October it was 3.5% less than the year before. In general, over ten months of this year export shrank by 1.7% if compared to the same period the year before.
In annual terms the decline in the amount of export in October was the most affected by the decline in export of machinery and electrical equipment (-17%), also of mineral products (-20%). Given that import has fallen for this group of products as well, it can be stated that decline in export in October was condition by shrinking of re-export.
However, the export indices were weighted down by export of such product groups as woods and wood products (-5%, including fall of export to Great Britain by 20%), as well as food products (3%), which predominantly are commodities of local origin.
The largest fall in the food segment was observed in rapeseed export – this is due to the fact that this year they began its export a month earlier.
In its turn a positive contribution to the annual export growth was made by building materials, chemicals and textile.
The volumes of the Latvian export and import for the first nine months of this year were lower than the Lithuanian and Estonian export and import.
If to take absolute figures than over nine months of 2016 the volume of the Latvian export made up 7.471 billion euro, Lithuania exported goods worth 16.436 billion euro, but Estonia – 8.817 billion euro.
The rise in commodity prices in the world and improvement of the external demand would help export next year to grow faster. However, populist sentiments in the world contribute to the increase of threat of protectionism, which, in its turn, would adversely affect Latvian export. To ensure the export growth it is important to enhance competitiveness, by tapping new markets and raising added value of export goods made in Latvia.
Sentiments of exporters can be improved once we get clarity as to the influence of BREXIT and position of newly elected president of the USA on issues of foreign policy and trade. To improve sentiments also in non-exporting companies it is necessary to stabilize taxation policy and to identify clearly the national development strategy. For businessmen it is important to keep abreast of taxation policy, forthcoming changes and deadlines, within which such changes must be implemented.
In light of the aforesaid the minimal task for 2017 is the preservation of export at the level of this year — ca. 10 billion euro. In its turn, the maximum task lies in that by using the opening windows of foreign policy opportunities and by adjusting the internal environment, to intensify Latvian export by 20 percent, by bringing it in absolute figures to 12 billion euro.
Which scenario the Latvian economy would go for will become clear already by the middle of next year.