bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 20.08.2017 | Name days: Bernhards, Boriss
LatviaLatvia

Economic Diary of Latvia. Dreams come true: residents’ income grows and prices do not

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn Q3 2014, gross salaries in Latvia reached EUR 775, which is 7.4% larger than last year’s index, as reported by Latvian Economy Ministry.

Salary growth was provided by the improvement of the economic situation and the growth of minimal wages at the beginning of the year. Changes to tax legislation also played a major role in this.

Compared to 2013, when wage growth was largely moderate in the private and public sectors, this year’s wage increase was more rapid in the private sector and was 8.5% in Q3 2014.

Analysts say there is a wage rise in all main industrial sectors of Latvia’s economy. Income has been increasing rapidly in areas of professional, scientific and technical services, construction, administration, agriculture and forestry.

Wages have increase by 7.9% in Latvia’s processing industry in Q3 2014. It nonetheless remains 9% below the average level in the country. The best dynamics in this segment has been noted with producers of electronic and optical devices (+14.8%), furniture producers (+14.3%), manufacturers of fabricated metal products (12.2%) and food product manufacturers (+10.4%). On the other hand, salaries of workers of textile industry and drinks producers have reduced.

Entrepreneurs lie in wait

Another optimistic piece of information has been reported by Finance Ministry: Latvia’s GDP has grown 2.5% in Q3 2014 in comparison with the same period of 2013.

The largest growth has been noted in commercial trade and services, which accounts for half of the registered GDP growth. A decline in production volumes has been noted in forestry (-5.9%) and processing industry (-0.6%).

In general, the situation in Latvia’s national economy remains the same as it was in the first half-year – export potential is being limited on foreign markets and demand in the country grows moderately.

In particular, the total export volume remained the same in Q3 2014 as it was in the same period of 2013. Nevertheless, exports of goods have grown 3.2% and exports of services have reduced 6.4%. At the same time, private consumption has become somewhat slower in Latvia – it has increased only 2.1% during this period.

Because of the emerging uncertainty in foreign markets, entrepreneurs lie in wait. This has forced investments to reduce by nearly 2%.

According to estimates of Economy Ministry, Latvia’s GDP growth will be 2.5% at the end of 2014. GDP growth is expected to reach 2.5% – 3% in 2015.

Fuel to become cheaper

According to latest price monitoring data compiled by Economy Ministry, the price level in the country remained more or less the same in 85.9% of cases in November. Price growth has been noted in 5% of cases and price reductions in 9.1% of cases.

Fuel prices declined by 4%-7% in November. Meanwhile, oil continued to become cheaper in the world; within one month the price had declined by 15%.

The International Monetary Fund believes the decline of oil prices has a positive effect on global economy. This week, Christine Lagarde announced that the 30% decline of prices on crude oil could lead to additional economic growth 0.8% in the majority of industrially-developed countries, because they are the ones who import oil the most.

Principle to be made an option

The Latvian government has approved the decision to put off the introduction of amendments to the Insolvency Law until March 1st, 2015. These amendments provide for the application of the principle of handing over keys.

Legislators plan to change regulations and allow mortgage borrowers and creditors to apply this mechanism not as a mandatory measure, but as a voluntary option agreed upon by both sides.

It was initially planned that this principle would be introduced on January 1st, 2015. However, it was met with protests from banks. Creditors noted that this would lead to more expensive loans, which would in turn make housing loans less available for young families.

Foreign analysts see stability in Latvia

At the end of last week, Standard & Poor’s decided to maintain Latvia’s long-term rating at A- and the country’s short-term rating at A-2 with a stable outlook, as reported by State Treasury of Latvia.

The agency believes Latvia’s GDP growth will remain at 3.5% for the next several years. Analysts have praised the impressive deficit decline (from 9% in 2009 to 0.9% in 2013) and the continuously declining state debt, which is expected to reduce to 30% by 2017. Among Latvia’s strong sides, the agency sees fiscal discipline and effective state administration. S&P expect that Latvia will conclude 2014 with GDP growth of 2.4%. Latvia’s GDP growth of 2015 is expected to reach 3.5%.

Ref: 017.109.109.4235


Leave a reply

Kirsis asks police to assess possible forging of votes at Riga City Council

Riga City Council’s Unity faction chairman Vilnis Kirsis has asked State Police to check if the city council’s electronic voting system was used without another deputy’s knowledge or consent, said the politician.

Expert: attack in Spain shows how terrorists switched to more easily reachable targets

Terrorist attacks that transpired in Spain this week shows how terrorists have switched to more easily reachable targets, where security requirements are not as strict, says Latvian National Defence Academy’s Security and Strategic Research Centre researcher Martins Hirss.

New mandatory tests in schools to be introduced four years from now

In four years’ time – 2021/2022 school year – it is planned to introduce completely new mandatory tests in schools, as reported by State Education Content Centre Director Guntars Catlaks.

Nearly 9,000 children and their parents got homes thanks to state support programme

In the first half-year of 2017, state support helped 1,527 families in Latvia to buy homes. Compared with last year, families’ demand for state support has grown 6%, as reported by Altum finance institute.

Prediction: Aseradens will likely take control over Unity

Economy Minister Arvils Aseradens will become the head of Unity, Betsafe bookmakers predict. The possibility of Aseradens becoming the head of the party is given 45% probability by Betsafe.

Provisional estimate for next year’s fiscal space in Latvia is EUR 60 million

Next year’s fiscal space has been estimated at EUR 60 million, as noted by Finance Minister Dana Reizniece-Ozola, adding that a more precise estimate will be available at the end of August.

Reconstruction of Vilnius airport runway concludes; aircraft return to Vilnius

On Thursday, 17 August, Vilnius airport’s runway was festively opened. This was the most massive reconstruction for the airport in the past 20 years. It was a unique project for Lithuania and all of Europe, airport representatives say.

Islamic State terrorist group takes responsibility for Barcelona attack

The recent terrorist attack in Barcelona, in which a shuttle bus rammed a crowd of people on La Rambla, killing 13 and injuring at least 100, has become this week’s topic.

Weather in Latvia to be warm but rainy on weekends

The sun will appear every now and then between clouds on Friday, 18 August. Still, some rain is expected, especially in the afternoon in Latvia’s eastern regions, where thunderstorms may appear. Rain is expected to reach the capital in the afternoon. Wind will draw in from the south. Air temperature will reach +21° C… +26° C, according to State Environment, Geology and Meteorology Centre.

Latvia’s export growth was moderately rapid in the first six months of 2017

Compared with the same period of 2016, Latvia experienced a moderately rapid export growth in the first six months of 2017, according to data published by Eurostat on Thursday, 17 August.

Latvia’s annual inflation in July was one of the highest in Europe

Inflation indexes in Latvia and the UK both reached 2.6% in July, which is one of the highest indexes in the European Union, according to data published by Eurostat on Thursday, 17 August.

Kirsis withdraws his candidacy in favour of Aseradens

Riga City Council member Vilnis Kirsis has decided to withdraw his candidacy from the race to become chairman of Unity in favour of a different candidate – Economy Minister Arvils Aseradens.

Rinkevics expresses Latvia’s interest in maintaining political consultations with Palestine

On Thursday, 17 August, Latvia’s Foreign Affairs Minister Edgars Rinkevics met with the leader of Palestine’s diplomatic mission in Latvia, ambassador Taissir Al Adjouri, to discuss mutual relations between Latvia and Palestine and the peace process in the Middle East.

Putin grins to the world’s seven billionth baby, Lithuania wary of border incidents

Russian President Vladimir Putin paid a visit this Wednesday to Kaliningrad, the westernmost point of Russia, but the reports about his trip in the Russian enclave and over the border in Lithuania were strikingly different.

Survey: red considered the safest colour for a car

Most Latvian drivers consider red to be the safest colour for a car. The most popular, however, is black, according to results of a survey by Virši-A fuel trader.

airBaltic’s number of carried passengers reaches a record in second consecutive month

Latvian airBaltic airline carried 393,312 passengers in July 2017, which is 21% more than the same period last year. The number of passengers carried by airBaltic remains the highest it has ever been in the airline’s history, BNN was informed by the company.

Brivais vilnis: nearly all fish processing companies are experiencing losses

Currently nearly all fish processing companies in Latvia are experiencing major or minor losses, says Brivais vilnis chairman Arnols Babris.

American helicopters to perform low-altitude flights within Latvia’s airspace

U.S. Air Force Brigade’s Task Force Phoenix helicopters, which are stationed in Latvia as part of Atlantic Resolve operation, will be performing low-altitude flights from 16:00 to 18:00 from Lielvarde to Dobele on Friday, 18 August.

Healthcare Ministry’s state secretary Karlis Ketners may be replaced

Latvian Healthcare Ministry may replace its state secretary Karlis Ketners. It is possible he will be transferred to work at Finance Ministry, as reported by LTV.

Suspects in Europe's insecticide egg scandal before Dutch court

In the Netherlands, two men have been in court in relation to the scandal of eggs containing banned insecticide that has caused an EU-wide health scare and cost millions of euros of damages.

Indian national with fake documents apprehended on Latvian border

An Indian citizen travelling from Moscow on a bus was caught at Terehovo border control point in Latvia for presenting officers a fake EU family member’s resident card. No criminal process was launched. The person returned to the country he was travelling from.

Latvijas dzelzceļš will not have to pay dividends from last year’s profits

The government decided on Wednesday, 16 August, that Latvijas dzelzceļš will not have to pay dividends from last year’s profits, which were EUR 880,998.

Latvian citizenship provided to 103 people

The Cabinet of Ministers has issued an order to provide Latvian citizenship to 103 people through naturalization.

Estonian Inbank's profits reach EUR 5.7 million in six months

Estonian financial services' provided Inbank made a profit of 5.7 million euros in the first half of 2017, which is a 429.4% increase compared to the respective period in 2016.

Agriculture Ministry invites residents to sign up for measures to support fisheries

From 21 August onward, Rural Support Service plans to start accepting applications for projects to receive support from European Maritime and Fisheries Fund’s action plan for development of fisheries in 2014-2020 as part of projects Innovation, Productive Investments in Aquaculture and Fishing and Aquaculture project processing.

Newest comments