According to the latest data of the Central Statistics Office, in March 2024, the value of Latvia’s export of goods was 1,522.6 million euros, which is 0.4% more than the previous month. However, on an annual basis, a significant drop of 18.8% was recorded in the export of goods, which is significantly more than in the previous months of this year. Thus, it must be concluded that the export of goods in annual terms is decreasing for 12 months in a row. In the first quarter of 2024, the export value of goods was also 8.9% lower compared to the corresponding period last year.
In recent months, the export value of goods has stabilized, which is also evidenced by the changes in exports in monthly terms. On the other hand, the fall in exports in March was largely determined by base effects. There is no reason to believe that the same strong decrease in goods exports as in March will continue in the coming months. At the same time, as the external environment remains unchanged and external demand remains weak, there are currently no prerequisites for export growth either. It is expected that in the second quarter of this year, the value of export of goods will be close to the level of the corresponding quarter of last year. On the other hand, the future development of exports will be determined by economic activity in Latvia’s largest export market – the European Union (EU).
Evaluating the most current confidence indicators of the EU economy, it must be concluded that they remain at a stable low level. Entrepreneurs’ and consumers’ assessment of economic activity in EU member states is different. However, in the most important export markets for Latvia – Germany, Lithuania, Estonia, the Netherlands and Sweden – economic confidence can be considered rather pessimistic. In April this year, the International Monetary Fund (IMF) updated its macroeconomic forecasts, cutting eurozone gross domestic product (GDP) growth this year by 0.1 percentage point to 0.8%, largely influenced by lower economic growth forecasts in Germany and France compared to the previous estimate. According to the IMF forecasts, in 2024 the German and French economies, which are the engines of the EU economy, will increase by 0.2% and 0.7%, respectively. This assessment for both countries is 0.3 percentage points lower than in previous economic forecasts. This confirms that external demand remains low.
Evaluating the changes in exports in different commodity groups in March of this year, it must be concluded that exports decreased in all commodity groups. The largest negative contribution to the total decrease in goods exports in March of this year was determined by the drop in the export of mineral products by a total of 46.8%, thus explaining 5.3 percentage points of the total decrease. The drop in the export of mineral products was influenced by the decrease in the re-export of oil gas by 84.9%, as well as the drop in the export of electricity by 12.6%.
A significant drop in exports was also recorded for mechanisms and electrical equipment, by a total of 21.8% compared to March of last year. The decline in exports was mainly recorded for electrical equipment and other electrical equipment. The value of the export of wood and wood products decreased by 14.1%, which was negatively affected by the lower export of wood pellets, unprocessed timber, carpenters’ products, veneer and plywood.
Ministry of Finance
