July trade figures show scale of trade swings to central Asian countries

The value of exported goods reduced by 15 % and of imported goods by 19.6 %. In July Latvia exported EUR 1.36 billion and imported EUR 1.79 billion of goods.

As exports intotal foreign trade rose from 41.9 % in July 2022 to 43.3 % in July 2023, the foreign trade balance improved. The statistics for foreign trade in goods is shown in actual prices and calculated based on the goods value in euros, not the physical amount or quantity.

During the seven months of this year Latvian foreign trade turnover at current prices reached EUR 24.57 billion, which is EUR 1.61 billion or 6.2 % below the corresponding period of 2022. The total value of exports was EUR 11.01 billion (down by EUR 672.5 million or 5.8 %) and of imports EUR 13.56 billion (down by EUR 937.6 million or 6.5 %).

Calendar and seasonally adjusted data show that over the year (in July 2023 compared to July 2022) value of exports reduced by 12.4 % and of imports by 18 % while over the month (in July 2023 compared to June 2023) value of exports increased by 2.9 %, but of imports reduced by 4.3 %.

In July, Lithuania (18.6 % of total exports), Estonia (11.2 %), Germany (7 %) and the Russian Federation (6.2 %) were the main export partners of Latvia while Lithuania (21.2 % of total Latvian imports), Germany (12.4 %), Poland (10.8 %) and Estonia (9.8 %) were the main import partners.

In July 2023 Latvia had surplus trade balance (meaning that value of exports was greater than the value of imports) with 114 countries and deficit trade balance with 49 countries.

Foreign trade with Belarus, Russian Federation and Ukraine in July 2023

The figures also showe that in January-July 2023, 346 enterprises exported goods to the Russian Federation, and 180 to Belarus. In turn, the number of enterprises exporting to the Russian Federation and Belarus in the corresponding period of 2022 comprised 749 and 322, respectively.

In January-July 2023, 276 enterprises imported goods from the Russian Federation, and 204 from Belarus. The number of enterprises importing goods from these countries in seven months of 2022 comprised 1 182 enterprises from the Russian Federation and 548 from Belarus.

In what may be an indicator that other companies are seeking to trade with Russia and Belarus via the back door, trade with countries in central Asia bordering Russia continues to boom. 

In January-July 2023, compared to the same period of 2022, exports to Kazakhstan has increased by EUR 32.7 million or 84.5 %, to Kyrgyzstan – by EUR 27.1 million or 5.8 times, to Uzbekistan – by EUR 13.8 million or 36.3 %.

In January-July 2023, compared to the seven months of 2022, imports from Uzbekistan have grown by EUR 16.2 million or 4.2 times, from Kazakhstan – by EUR 23.1 million or 84.2 %, from Azerbaijan – by EUR 1.5 million or 69 %.

In January-July 2023, compared to the same period of 2022, the number of exporting and importing enterprises has also increased with certain CIS countries. In particular, the rise was observed in the number of enterprises in trade with Kazakhstan – in exports by 115 enterprises, in imports – by 33 enterprises.

Commenting on the trade figures later on Monday, the Finance Ministry said:

"During recent months, an obvious trend of a sharp decrease in external demand has been noted, negatively affecting the development of Latvia's export of goods. For the fourth month in a row, the value of exports of goods has decreased by more than 10%...  At the same time, it should be noted that the export value is decreasing from the very high level that was reached last year, due to the rise in the prices of raw materials and the increase in the volume of re-exports. The export value of goods in July of this year amounted to 1,363 million euros, which in general corresponds to the average export value of one month in 2021."

Latvian goods are being affected by weak external demand, especially from the European Union (EU) in general and Estonia, Poland, Sweden and Germany in particular in the second quarter of this year, said the Finance Ministry.

"Evaluating the economic sentiment of entrepreneurs and consumers in the EU member states, it must be concluded that it continues to deteriorate," it said.