Production output might increase much slower this year due to foreign demand, although, if most important trade partners of Latvia will not experience decline, production output might not decrease, state economists.

Igors Kasjanovs, economist of the Bank of Latvia:

Dynamics of the manufacturing industry in 2011 was fluctuating, but with clear increase tendency which was caused by stable foreign demand and the recovered competitiveness of the industry. Year coming to its end, the increase tendency started to slow down due to decrease of demand in foreign markets and increase of uncertainty. It can be expected that because of European debt crisis situation will be very fluctuating, but possibly – with a slight decrease tendency.

Peteris Strautins, expert in economics of the DNB bank:

While events in eurozone is not affecting export, consumption rate will not decrease, therefore we don’t have to worry about implementation of the state budget in the first half of next year. In case of a very negative global development there might appear problems in the second half of the year, but it is only a possibility. Production output will increase slower than this year, but probably it will exceed total economic development rate of the eurozone which will be around 2.5%.

Industry in total has grown slower than manufacturing industry, by 0.9% and 8.5% a year, but it has a simple explanation – because of warm weather demand for energy has been low.

Lija Strasuna, senior economist of Swedbank:

Thanks to increase of output in November, also annual growth of industry accelerated – it increased by 8.5% (manufacturing industry – by 12.1%). At the moment it seems that average industrial growth of 2011 might exceed 9%, but growth of manufacturing industry even 12%. This is a bit less than 14.4% and 16% of 2010, but still it it a substantial increase. We can say that manufacturing industry has completely recovered from crisis – current output is similar to maximum of 2007 and 2008.

It was already reported that compared to October 2011, industrial production output in November increased by 0.9%, including manufacturing industry – by 3.2% and mining industry, and opencast pit management – by 0.8%, but decrease was reported in electricity and gas supply – by 1.6%.

Ref: 102.110.110.114