Latvijas Krajbanka Reported on Foreign Trade in August in Latvia
OREANDA-NEWS. October 16, 2008. The August statistics indicate that import is showing already two-digit cut for 11.1%, while the export amount is still showing positive increase. The foreign trade data is reflecting 2 tendencies: rapid decline of domestic economic activity and consumption, and slower development tempos abroad, reported the press-centre of Latvijas Krajbanka.
In August export grew by 4.1%, in comparison with the respective period of the previous year. It is interesting, that export to the main partner countries has decreased, except for the export to Lithuania and Denmark. Considering the financial crisis outburst and its impact on the European economy, the demand for Latvian export goods could continue to decline. At the same time the statistics is showing considerable increase of the export flow to the USA.
During the last year the decline of import flow for 20 and more percents was observed in almost all groups, the import flow of chemical industry goods and metal articles showed relatively small minus. At the same time the import of mineral product groups’ demonstrated considerable increase for 40.7%, which was promoted by increasing import of electric energy, natural gas and diesel fuel. Also the import of agricultural and food goods has increased.
Such a collapse of import flow in a one-year time is indicating on the rapid limitation of household consumption in Latvia, as well as on the almost of stiff activity of companies in the sphere on investments. Considering the facts, that the economic decrease phase will continue also the next year, it is unlikely to experience the increase of import amount in the nearest future.
Although it may sound cynical, this tendency also gives positive news: Latvian residents are considering their expenses more deliberately, dividing expenditures more efficiently. There is no secret, that during the last years we have spend too much, which also was one of the main factors for the rapid increase of retail trade and import. In today’s circumstances the excessive economy of westerners is mentioned very often, which in fact is an aspiration to act prudently with their money, and therefore it does not look as something incomprehensible.
In its turn the decline of mechanism and equipment import is indicating on the investment reduction to the company development, which, certainly, is a very bad signal. In such a situation the government support to business is very important. The reduction of bureaucracy in the distribution process of EU structural funds, more efficient management of structural funds and state orders are some of the activities that could considerably improve the recovery possibilities of industry and other sectors.