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Industrial production falling in eurozone, growing in Azerbaijan (Only figures)

13:20 16-02-2019
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Quite often we cite Europe as a recognised standard, especially those countries that are part of the so-called eurozone. And we remember the Old World when we talk about culture, the standard of living, social problems, and, of course, when it comes to the economy and its engine - industry. It was the industrial revolution that allowed the leading countries of the continent to shoot sharply ahead and subdue many countries in Asia, Africa, and America. And today, the eurozone sets the tone in many endeavours, but gradually its role and importance in the global economy is falling.

Thus, in December last year, industrial production in 19 countries of the eurozone declined more than expected, amid falling production of capital goods. According to the Statistical Office of the European Union (Eurostat), the volume of industrial production in the euro area in December decreased by 0.9% compared with the previous month. And in annual terms, the decline in industrial production was 4.2%. You must agree that the decline in industrial production is significant, few people could have expected such rates. After all, we are talking about the most developed part of Europe.

Many expected a reduction in industrial production, but analysts polled by Reuters, on average, predicted a decline of only 0.4% in monthly terms and 3.2% in annual terms. But the results, as you can see, exceeded all expectations. And this was not a surprise, for as early as November, industrial production in the eurozone declined by 1.7%, and in annual terms - by 3%. The decline was observed in almost all areas, and it continues today too.

Thus, energy production in December decreased by 0.4% compared with the previous month. True, production of consumer durable goods, such as cars or refrigerators, increased by 0.7%. But the output of consumer short-term goods, such as clothing, declined by 1.5% in monthly terms. Capital goods production also fell by 1.5%.

The situation is no better in the whole of the European Union. The volume of industrial production in 28 EU countries in December decreased by 0.5% in monthly terms and by 2.7% - in annual terms. Among the EU countries, for which data are available, the maximum decrease in industrial production compared to November was recorded in Ireland (-13.4%), in Malta (-5.2%) and in the Netherlands (-3.2%). The highest growth was registered in Denmark (+11.6%), Luxembourg (+3.5%) and Latvia (+3.3%). In annual terms, the most significant fall in industrial production was observed in Ireland (-19.8%), Spain (-6.7%) and Croatia (-6.6%). And the maximum growth was recorded in Denmark (+14.3%), Hungary (+5.8%) and Estonia (+5.7%).

How are things in the largest economies in Europe? Industrial production in Germany, the largest economy in the eurozone, increased by 0.2% in December compared with the previous month, after falling 1.4% in November. In annual terms, industrial production in the country decreased by 3.9% after the November decline of 4.5%. In France, in December industrial production grew 0.8% in monthly terms and decreased 1.7% in annual terms. In Italy, the first indicator also fell by 0.8%, the second - by 5.5%.

Industrial production is one of the main components of eurozone GDP along with services. But the European Commission sharply lowered forecasts for economic growth in the eurozone this year and the next due to the expected slowdown in the largest countries of the bloc - from Germany to Italy. The Commission expects economic growth in the eurozone to slow from 1.9% in 2018 to 1.3% in 2019. And only in 2020 it will accelerate to 1.6%. For comparison, we note that the November forecasts of the European Commission assumed the eurozone's GDP growth of 1.9% in 2019 and 1.7% in 2020.

Almost simultaneously with Eurostat, the State Statistics Committee of Azerbaijan cited data on the dynamics of industrial production in January of this year. And it is gratifying that our country is ahead of even the most developed countries of Europe in this most important indicator in the structure of GDP. Thus, according to the results of the first month of this year, industrial production in Azerbaijan amounted to 3.8 billion manats. Compared to the same period last year, this figure increased by 3.4%. Moreover, production in the non-oil industry for the month increased by 13.8%.

True, as in past times, the largest part, namely 72.5%, of production fell on the mining industry. Another 22% was produced by processing, 4.8% by production, distribution and supply of electricity, gas and steam, and only 0.7% - production in the field of water supply, waste treatment and recycling. Moreover, if in January oil production in the mining industry decreased by 0.8% (due to compliance with the agreement signed within the framework of OPEC+), the production of commercial gas increased by as much as 26.4%. Production, distribution and supply of electricity, gas and steam increased by 0.5%, and in the field of water supply, waste treatment and recycling by 8.1%.

As for the processing industry, there is mainly growth in non-traditional areas of the country. Thus, the production of cars, trailers and semi-trailers increased 2.9 times, furniture - 2.3 times, machinery and equipment - 2.1 times. Production of paper and cardboard increased by 75.2%, rubber and plastic products - by 63.3%, wood and wooden products - by 58.7%, products of the textile industry - by 56.9%, beverages - by 48.9 %, computers, electronic and optical goods - by 37.1%, chemical industry products - by 35.4%, electrical equipment - by 25.9%, installation and repair of machinery and equipment - by 15%, production of other vehicles - by 11.9%, construction materials - by 6.8%, leather and leather goods, footwear - by 1.5%.

For the sake of objectivity, it should be noted that in our country not all areas are doing so well. Thus, the production of printing products for the month decreased by 0.8%, products of the metallurgical industry - 16.1%, pharmaceutical products - 24.4%, finished metallurgical products - 25.4%, clothing - 32.3%, tobacco products - 33.5%. But they, although they are of major socio-economic importance, have a small share in the total volume of industrial production, therefore their influence on general indicators is insignificant. And here it is appropriate to recall the words frequently repeated by President Ilham Aliyev that it is necessary to look closely at Europe, but follow your own path.