In January 2023 Latvia’s foreign trade turnover accounted for EUR 3.48 billion, which is 11.8% higher than a year ago. Value of export goods increased by 8.9%, whereas value of import goods increased by 14.5%, according to provisional data from the Central Statistical Bureau of Latvia.
Commenting on these results, the Ministry of Finance notes – exports of Latvian goods continue going up, but the rate is becoming weaker.
In January Latvia exported goods worth EUR 1.63 billion and imported goods worth EUR 1.85 billion. Compared with January 2022, foreign trade balance has gotten worse. Exports went down from 48.1% to 46.9%. It is important to keep in mind that foreign trade data is reflected in actual prices and calculated based on the value of goods in euro, not their physical quantity.
According to calendar and seasonally adjusted data, in January 2023, as compared with January 2022, export value in actual prices was 5.9% higher, whereas import value was 13.6% higher than a year ago. Compared with December 2022, export value has increased by 1.5%, whereas import value has gone down by 5.5%.
In January Latvia’s biggest export partners included Lithuania (17.5% of total export volume), Estonia (13.1%), Germany (7%) and Finland (5.9%). The biggest import partners included Lithuania (25.6% of total import volume), Germany (10.9%), Poland (10%) and Estonia (7.9%).
The increase of exported grain products in January 2023, as compared with January 2022, was affected the most by exports of wheat and wheat rye mixtures by EUR 36.3 million or 2.4 times. Exports of lumber, wooden products and charcoal went down, reducing exports of saw-wood materials by EUR 50.9 million or 51.7%.
The increase of imports of mineral fuel, oil and petrol products was affected the most in January 2023 by the rapid increase of natural gas by EUR 133.8 million. Imports of iron and steel went down, as did imports of flat rolled products of iron and non-alloy steel by EUR 75.0 million or 85.2%.
In January 2023 Latvia’s foreign trade balance was positive with 117 partner countries, with value of exports exceeding that of imports. Trade was negative with 41 countries. In January 2023, when compared with January 2022, the proportion of EU member states went down by 1.8 percentage points in total export value. Their value in total imports increased by 10 percentage points. The proportion of CIS countries in exports increased by 0.2 percentage points and went down by 9.1 percentage points in imports.
The increase of exports to Ukraine in January 2023 was mainly affected by the growth of exports of mineral products by EUR 10.1 million. The increase of exports to Belarus accounted for EUR 3.2 million. Exports to the Russian Federation was mainly affected by a EUR 8.8 million drop in exports of mechanisms, mechanical equipment and electrical appliances.
In January 2023, as compared with January 2022, the drop of imports from the Russian Federation and Ukraine was affected the most by the drop in imports of metals and their products by EUR 79.9 million and EUR 9.6 million respectively. Imports from Belarus were impacted the most by the drop in imports of lumber and wooden products by EUR 13.5 million.
The Ministry of Finance explains – as exports of Latvian goods continued going up, the rate continues becoming weaker. Last year’s trends remain. It is expected for exports in actual prices to continue growing at the beginning of the year. However, growth rates will continue going down.
At the same time, the ministry stresses that in the current geopolitical situation, development of exports is still considered satisfactory. At the end of 2022 European Union’s economic growth slowed to the lowest growth rate since 2020. In Q4 2022 EU’s GDP grew by a mere 1.5%.
The import value, which reflects foreign demand, went up by 3.2% when compared with the same period of 2022. This is significantly less when compared with previous quarters. EU’s market accounts for 70% of Latvia’s export volume. This means economic activity in Europe directly is directly reflected in Latvia’s foreign trade data. High energy resource prices and the deteriorating geopolitical situation had a negative impact on residents’ purchasing power and over all activity of investors in Europe and Latvia, as concluded by the Ministry of Finance.
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Latvia’s foreign trade turnover up 11.8% in January when compared with a year ago
