Latviski English По-русски
Sunday 24.09.2017 | Name days: Agris, Agrita

Economic Diary of Latvia. Recovery of Europe's economy is in Latvia's hands

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s main objective during the presidency period over the EU Council is the development and launch of Juncker’s investment plan.

As it is known, The President of the European Commission Jean Claude Juncker had presented an investment plan for Europe in November 2014. The main objective of this plan is to stimulate investments in development and creation of jobs.

«This plan will be one of the most significant economic stimulation mechanisms for Europe. This is why we have a high goal ahead of us – to make sure the European Fund for Strategic Investments becomes operational in the middle of 2015. This is why we have made it our duty to ensure regulations necessary for the accomplishment of this goal are approved. This will be one of the main objectives during Latvia’s presidency over the EU Council,» – said Latvian Finance Minister Janis Reirs.

Juncker’s plan provides for the foundation of the European Fund for Strategic Investments. The European Investment Bank will then invest EUR 5 billion and the EU fund will be provided an additional amount of EUR 16 billion from the EU budget. This will create an opportunity to attract additional investments for business development projects. According to authors of this project, the fund will provide investments worth a total of at least EUR 315 billion.

Funding will be allocated using capital deposits, bonds, hybrid instruments and guarantees. Deposits from EU member states will be voluntary.

The new fund and a group of independent experts should become active by June 2015.

In 2014, each of the current EU member states submitted a number of potential projects that could potentially fall under the category of projects financed by this new fund. These projects represent areas like energy, research and development, transport, social infrastructure and environment.

It is worth noting that there is no set limit for the volume of investments and the number of projects that can potentially be provided with EU funding. Economic sustainability will be the main criterion in the assessment of potentially financed projects.

Producers remain active

During the first eleven months of 2014, production volumes remained largely on the level of 2013, notes Swedbank economist Lija Strasuna. In spite of the decline experienced in recent months (partially due to the Russian embargo), production of food products remains positive 3%. Good growth was noted in wood processing (8%), chemical (11%), and mechanical engineering (especially in the manufacture of computers and electronics, where growth was 60%).

At the same time, production volumes in textile and clothes manufacture continued to decline. This was partially because of the decline in demand in Russia.

«On the one hand, demand in is decline in Russia even though Latvian manufacturers are trying to compensate this at the expense of other markets. On the other hand, if Liepājas Metalurgs manages to restart its production, we weill definitely see significant growth in all production areas – says the expert.

Russians – the most active founders of firms

2,647 new companies had been founded in Latvia in 2014. In 17.7% of all cases, there was a foreigner present in the foundation of new companies, according to information from Lursoft IT.

The majority of companies founded in Latvia with participation of foreigners wee founded by Russians (816), Lithuanians (373), Estonia (250) and Italy (250).

Ukraine is on the fifth place with 158. According to Lursoft, the volume of direct investment from Ukraine to Latvia has increased by EUR 9.95 million and the number of business deals has increased by 36.7% over the course of the year.

Number of «newborn» firms in decline; number of «dying» firms on a rise

According to data from the same Lursoft IT, there had been 14,965 new enterprises registered in Latvia in 2014. 13,991 of them are LTDs.

4,152 enterprises had been liquidated in 2013. 6,402 enterprises had been liquidated in 2014.

Lursoft IT representatives believe the increase in the number of liquidated enterprises should not be regarded as a process tied to the decline of the country’s economic situation. Experts believe this is because of changing regulations in the business environment. These changes include the increased activity of the State Revenue Service in the exclusion of companies that have not been economically active for a long time from the register of enterprises. Information from Lursoft IT states that zero turnover is shown by approximately 15-20% of all enterprises that have submitted annual accounts.

In regard to the age of enterprises that are being liquidated, the majority of them were founded in 2004 or 2005. Most of the companies that have been liquidated were engaged in trade, real estate and construction.

As for new companies, registered in 2014, the majority were founded as LTDs with reduced base capital – 9,201 (7.52% of them are already liquidated) or 61.48% of the total number of enterprises founded in 2014.


Leave a reply

BNN summary of the week: Vējoņis’ authority under fire and Loginovs ordered to repay illegal donations

BNN offers a summary of this week’s topical news in a variety of categories: Fight; Truth; Business; Future; Growth and Opinion.

Kariņš: Unity started drifting when Valdis Dombrovskis left is management

Unity should seriously consider the option of starting in Saeima elections alongside other parties, said MEP Krišjānis Kariņš in an interview to Latvijas Radio.

CSP: average size of agricultural areas increases in Latvia

In 2016 the average size of agricultural holding constituted 43.2 ha, which is 15.5 % more than in 2013 when the average land area per holding accounted for 37.4 ha. The total standard output has risen by 24.5 %. Nevertheless, the number of economically active farms has reduced by 14.5 %.

Antāne forms a new political party in Ventspils with more than 350 associates

A new political party was founded in Ventspils this Thursday, 21 September. The name of this new party is Laiks Pārmaiņām (Time for Changes). The initiator of the founding of this new party is Baltic Association – Transport and Logistics President Inga Antāne.

NATO: suspicions about Zapad 2017 were justified

NATO views its suspicions about Russian-Belarusian Zapad 2017 military exercises as well-justified, because their scale and geography were larger than what was officially stated.

Expert: Latvia’s electronic industry productivity index on a rise

Electronics industry is the most rapidly growing processing industry in Latvia. This industry’s turnover growth in Latvia has been more rapid than that of Europe and the rest of Baltic States, says manager of wholesale trade company Lemona Latvija Sergejs Nikiforovs.

Video: How to make white-water rafting more dangerous?

If you think white-water rafting is a piece of cake, you can try getting over some rapids on six rafts.

Kaimiņš: Lembergs is Latvia’s biggest misfortune

It is no secret to anyone that the parliamentary committee in charge of investigating Oligarch case has so-called experts that are closely associated with infamous Ventspils politician Aivars Lembergs or his family. In an interview to BNN, Saeima member Artuss Kaimiņš shared his opinion about the latest scandalous development associated with Oligarch talks. He calls Lembergs Latvia’s biggest misfortune.

EC: Money for Rail Baltica in next period will be negotiated

Funding of the Rail Baltica railway project after the year 2020 will be negotiated upon as part of the EU's financial plan for the next period, has stated the European Commissioner for Mobility and Transport.

Sudraba published «false information» on parliamentary committee’s website

Parliamentarian Andrejs Judins asks to evaluate Inguna Sudraba’s possible breach of ethics with the publication of ‘false information’ on the website of Saeima’s parliamentary investigation committee responsible for the investigation of oligarch case.

Estonia plans to direct 300 million euros to healthcare

With the aim of improving the quality and access to Estonian healthcare, the country's government has backed amendments, which set forth increasing healthcare funding by 300 million over a period of five years

HTC agrees to sell part of its innovators and intellectual property to Google

U.S. computer technology firm Google has reached a deal with Taiwanese smartphone-maker HTC so that the latter would share part of its product development team and allow using HTC intellectual property.

22-year sentence for Imanta paedophile comes into force

With the Supreme Court of Justice abandoning the review of Riga Regional Court’s ruling, the 22-year sentence for the man prosecuted in the so-called Imanta paedophile case has come into force, as reported by the court.

Weekend in Latvia expected to be warm and sunny

The sky in Latvia will become clear during the day on Friday, 22 September. Rain is only expected to come to certain western areas. Air temperature will likely reach +16° C… +20° C, whereas air temperature at night will drop to +9° C… +14° C, as reported by State Environment, Geology and Meteorology Centre.

UK to offer EU 20 billion euros, if it can remain in single market

British Prime Minister Theresa May plans to offer a transitional agreement with the European Union that would concern a two-year period until the country leaves the bloc in 2019.

Number of bankruptcies down in Latvia and Estonia but up in Lithuania

Last year, the number of bankruptcies declined 12.4% in Latvia and 10.9% in Estonia. Lithuania, on the other hand, had experienced a 35.2% increase in the number of bankrupt companies, according to information compiled by Coface.

Lithuania sets off alarm bells over quality of international brands' foods

What Lithuania‘s State Food and Veterinary service announced last Tuesday was big news in Lithuania, but not so of a discovery to the majority of Eastern European consumers - food of international brands sold in Western Europe and in Eastern Europe, and Lithuania, are not just the same.

Saeima forms a group to support HIV and tuberculosis patients

On Thursday, 21 September, Latvia’s Saeima agreed with deputy Hosams Abu Meri’s proposal to form a deputy group to support HIV and tuberculosis patients, as confirmed by Abu Meri’s assistant Edgars Ikstens.

Politologist comments whether Vējoņis’ authority is at risk or not

Saeima’s vote in which Latvian President Raimonds Vējoņis’ proposal on the status of non-citizens’ children was not pushed forward was as though a strike against the president’s authority, comments Filips Rajevskis.

In pictures: Mexicans rush to find quake survivors

A massive rescue effort is continuing in Mexico City and other areas in Mexico to find possible survivors caught under buildings that collapsed in the September 19 earthquake, which has killed no less than 237 people.

Producer prices in industry grew 0.1% in August

Compared to July, the level of producer prices in Latvian industry rose by 0.1 % in August 2017. Prices of products sold on the domestic market, as well as those of exported products grew by 0.1 %.

Saeima supports simplification of investigation of less serious crimes

On Thursday, 21 September, Latvia’s Saeima conceptually supported changes to the Criminal Process Law that provide for simplification of investigation procedures of less serious crimes.

Ozoliņš: transit and logistics industries should communicate more actively

Mutual communication and information exchange among businesses working in the industry is the pre-condition for improvement of Latvia’s transit industry, said Transport Ministry’s state secretary Kaspars Ozoliņš at a meeting of the Logistics Council.

As Estonia mends ID cyber vulnerability, officials recommended mobile ID

As Estonia tries to solve potential security risks found in the chips of 750,000 national ID cards, state officials using e-services have been recommended to Mobile-ID in addition to ID cards.

Vējonis: peaceful resolution of Ukraine’s conflict is Latvia’s priority

«Russia’s unjustified aggression towards its neighbours is a serious breach of international law. Any aggressor who begins and continues such conflicts should be brought to justice for breach of international law,» says Latvian President Raimonds Vējonis.

Newest comments