Latviski English По-русски
Monday 22.01.2018 | Name days: Austris

Economic Diary. Latvia Week 28 of 2012

(No Ratings Yet)

The holiday season does not contribute to the lively economic life of our country. Nevertheless, there were separate flares of business activity this week.

The President prefers energy independence

Even the President of Latvia Andris Berzins is concerned with the issue of energy independence. He invited elected Saeima deputies from Latgale that are part of the ruling coalition, to discuss the possibility of constructing two new HES on Daugava River. The people’s representatives could not give a definite answer, noting that this issue requires an in-depth investigation.

Last month, the head of the state presented an idea to add new sections to the cascade of Hydro Electric Dams on Daugava River. The development of national capacities in the production of electrical energy could become an alternative to the participation in the construction of the Visagina NPP in Lithuania. The reanimation of the Daugavpils HEP project that was cancelled due to protests from the «green» movements in the late 80s was noted as the most possible variant. However, now, the Saeima deputies do not deny the old idea as categorically as they did in the past, saying that this issue should be discussed in detail by specialists.

Latvenergo specialists, on the other hand, are skeptical about this idea. Member of the Board of the energy monopolist Maris Kunickis claims that the reanimation of the Soviet project is impossible. Back then, it was planned to construct a 200 MW hydropower plant, but this would cause the flooding of large territories of land not just in Latvia but in Belarus as well. If the area of the water reservoir is limited to only Latvia, the power output of the station would reduce to 100 MW, which will immediately make it hardly cost worthy. What about the Jekabpils HEP? Power output can only reach 30MW, which will not make an impact on the country’s energy independence.

Who are they – the most honest ones?

While the head of the state is busy with global problems, the State Revenue Service (SRS) begins compiling the so called «white list» – a register of the most honest people in the relationships with the state company. At least two companies have already handed in applications to be admitted to this list, but the state service is not planning on revealing their names yet. If these candidates are deemed worthy to be included on the «white list», information regarding them will be published on the website of the Finance Ministry; if not, it will remain a secret.

The wait for the publishing of the names of the courageous ones will not take long. According to the rules, the SRS is obligated to evaluate a candidate within ten days and then report to the Finance Ministry. With a full compliance with the required criteria, the ministry will allow a company’s inclusion on the «white list»; while with a clear discrepancy will only result in a decline. Insignificant irregularities in specific points will forward the candidate to a special commission (it includes officials and representatives of business organizations). If a situation reaches this institute, ten more days will pass before the commission will give its recommendation – whether the candidate is fit or not.

At first, «white list» members will have only modest bonuses – all from the SRS. The service will allocate special consultants for them (even though only big companies that are already well within the sight of the Office of large taxpayers will be able to join the rotation during the first year) who will warn them about the risks of not paying taxes; swiftly return VAT and respond to inquiries faster. In time, the list of benefits could include additional bonuses: the ministries are ordered to evaluate their own readiness to support honest businessmen. After the end the year, the range of candidates is also expected to increase.

Tax e-Book

The abolishing of traditional tax books: another initiative of the SRS – to replace traditional tax books with electronic versions. Right now, the SRS is preparing a full report for the Cabinet of Ministers on this topic, so the current information on this topic is rather scarce. Nevertheless, it is already known that the main connection channel will be the Electronic Declaration System (EDS). It is expected that individuals will use it on equal terms with businessmen to look up the volume of discounts on PIT and its source (if the person is employed on more than one job). Those, who will remain on the outside of the system, will be able to look up this kind of information using

Foreigners are buying up Jurmala

Finally, one more fact worth mentioning – Jurmala is once again going through a rather massive construction of residential homes. At least, statistics state that Jurmala’s real-estate segment is going up. According to Jurmala City Council, 169 – 193 construction permits were handed out in 2006-2008, these permits mostly accounted for residential houses. In 2009, this market predictably collapsed, and only 79 such permits were handed out that year. The situation gradually improved – there were 106 permits handed out in 2011.

According to market players, there are currently 15-20 multi apartment residential houses that are already issued for exploitation or are expected to be finished in the nearest time. As a result – there are around 300 apartments available in new projects in different stages of readiness. Fifty six buildings are considered to be elite housing by specialists. The rest is business class.

The explosion was caused by the lack of sufficient supply in Jurmala, i.e., no new projects were being constructed in 2008-2010. Furthermore, demand of real-estate was also affected by the opportunity of receiving investor residence permits, so new players decided to develop projects.

Foreign investors became the mechanism for launching the current real estate activity. As the head of the Jurmala department of Latio Edgars Spuravs says, foreigners are buying up around three quarters of housing in new projects. Some experts mention far more radical numbers. So, according to Marketing Manager of Ober Haus Evita Zembega-Zakalovska, foreigners are buying around 95% of housing in new projects. And all this is despite the fact that prices increased by 20-50% in the last two to three years. According to realtors, the price of one m2 varies right now from 2 500 to 5 000 EUR, depending on location: the closer to the sea and the Center of Jurmala – the more expensive it gets.


Leave a reply

Latvenergo: Latvia is the largest energy exporter in Baltic States

Latvia continues exporting electrical energy produced in the country – as of Monday, 22 January, it was 832 MW. Especially intensive energy production is recorded for Daugava’s hydro-electric power plants and Riga’s CHP plants. The largest import volume is registered for Lithuania, to which the amount of exported energy equals the amount consumed in Latvia, Latvenergo explains.

LALRG secretary general: we have to reduce gap in quality of life for EU citizens

Ever since Latvia joined the European Union, its population has declined 14%. The most significant decline was caused by the departure of residents of working age to other EU member states. Because of that, the population in eastern regions of Latvia has declined 23%.

Czechs up for close race in this week's presidential run-off

As the Czech Republic nears the second round of its presidential election this weekend, sociologists estimate that the pro-Western academic Jiří Drahoš enjoys a somewhat larger support than the incumbent Miloš Zeman, who easily won the first round.

Producer price level in Latvia’s industry up 3.1%

Compared to December 2016, the level of producer prices in Latvian industry rose by 3.1 % in December 2017. Prices of products sold on the domestic market rose by 3.0 %, while prices of exported products went up by 3.3 %. Prices of products exported to euro area countries grew by 3.8 %, whereas prices of products exported to non-euro area countries rose by 2.9 %.

MEP: an even greater UGF dominance would slow down Latvia’s development

If the Union of Greens and Farmers (UGF) gains an even greater presence in the upcoming Saeima elections, Latvia’s continued development would suffer, said member of the European Parliament Artis Pabriks in an interview to 900 seconds programme of LNT.

Tax reform challenge in January: labour tax recalculation

2018 commenced for Latvia with a historical tax reform and conceptual changes, significantly affecting everyday work performed by businessmen, employers and accountants. One of the changes financial specialists have to remember when calculating wages for January is the one for personal income tax, which also includes changes for state social insurance fees and solidarity tax, BNN was told by accounting experts.

Total tax debts in Latvia reach 1.217 billion euros at beginning of 2018

At the beginning of the year, total tax debts in Latvia, including existing debts, halted debts and debts with extended repayment debts, reached EUR 1.217 billion, which is 3% less when compared with the previous month, as reported by the State Revenue Service.

Estonia emphasises animal welfare as demand for animal food products grows

Although the demand for food products from animals is increasing, attention should be paid both animal welfare and sustainability in agriculture, Estonia's Minister for Rural Affairs Tarmo Tamm has stated.

Latvia hopes to recover its status as a country free of swine fever

There is hope that Latvia may yet recover its status of a country free of swine fever, says Food and Veterinary Service’s (FVS) Animal Infections Monitoring Department lead expert Mārtiņš Seržants.

Estonia prepares to inform population of actions in case of emergency or war

Estonia is preparing a brochure on how its population should act in case of major crisis or war.

De Facto: international lawsuit against Latvia is associated with infamous Winergy case

Norvik Bank’s lawsuit against Latvian state in the international court of arbitration in Washington is associated with Winergy wind park business, as reported by De Facto programme of LTV. The bank has yet to announce the amount of money it wishes to enforce from the state

German Social Democrats vote to U-turn on coalition talks with Merkel's conservatives

In Germany, where four months after its federal parliamentary elections there is still no government, the Social Democrats have voted to enter coalition talks with the conservatives led by German Chancellor Angela Merkel.

Weather in Latvia to become warmer this week; thaw to settle in

Weather in Latvia will be dictated by an anticyclone at the beginning of the week. Precipitation is only expected in some areas, mostly in the north. The sky will be cloudy for the most part. Still some sun is expected every now and then, as reported by State Environment, Geology and Meteorology Centre.

Turkey crosses into Syria to attack Kurdish militia

Turkey's ground forces have entered the territory of neighbouring Syria strengthening Ankara's offensive to push Kurdish militia, considered to be terrorists by Turkey, away from the border.

Week in Lithuania. Fake news on Lithuanian Defence Minister planted on news portal

The Tv3. lt news website was hacked on Thursday, January 18 - a fake news story about Lithuanian Defence Minister Raimundas Karoblis was posted claiming that Karoblis allegedly harassed Ridas Jasiulionis, a journalist at the Žinių Radijas radio station, and admitted being gay.

BNN summary of the week: final report on Oligarchs case and ordered attacks on e-health

BNN offers a summary of this week’s topical news in a variety of categories: Change; Fight; Attack; Growth; Decline; Opinion; and Study.

Economist: the most important reform has to happen in people’s heads

«Of all the clever things taught to us in school about psychology, one thing that has stuck with me over the years is the idea of internal/external control point. There are people who believe they make their own fate. There are also people who believe our fate depends on external powers. I suspect people in Latvia explain successes and failures with external factors much more than people in Switzerland or any other country that has enjoyed its freedom longer than Latvia,» comments Luminor Bank’s economist Pēteris Strautiņš.

Minister promises bigger wages for working people and support for country’s industry

«Latvian Economy Ministry’s priorities for 2018 include increasing wages for working people and providing support to the country’s industry. For Latvia’s centenary year, every resident should have the right to experience the increase of the personal and state welfare,» promises Economy Minister Arvils Ašeradens.

Latvenergo: electricity price has declined 30% in the past three years

Average electricity price in Latvia has declined in recent years. The average price of electricity has declined by 30% at Nord Pool exchange between 2014 and 2017, allowing end user costs to decline, says Latvenergo.

Alcohol sellers in Estonia to be checked by little «police»

To find shop assistants illegally selling alcohol or tobacco to minors, Estonian police introduces the method of sending minors as police aides to retail shops to try to purchase the products banned to them.

EY study: cyber security has become a priority to banks this year

Over the course of the year, priorities of banks around the world have switched from reputation and risk management to data security matters, as concluded in the latest EY Global Banking Outlook 2018.

Political association: UGF and Harmony are covering up state capture

«Parliamentary investigation of Oligarchs case has shown what is what in the Saeima of the Republic of Latvia. Green farmers are in full harmony, covering up Aivars Lembergs and the fact of state capture. They and Inguna Sudraba have made the parliamentary investigation into a farce. Unfortunately, the power in those people’s hands is no farce – rather misfortune for all of Latvia. I hope citizens will take all that into account when they go voting,» says leader of Kustība Par! Daniels Pavļuts.

Tallinn-Helsinki tunnel plan lacks ambition, says «Angry Birds» game maker

While Finland and Estonia work on plans of an under-sea tunnel from Tallinn to Helsinki, the construction of which could start in the 2030s, a Finnish businessman, previously involved in development of Angy Birds video game, has presented plans to finish the massive construction project in 2024 already.

Experts: healthcare financing law will deny healthcare to the least protected

In a discussion regarding healthcare, experts said that Latvian President Raimonds Vējoņis’ proposed Healthcare Financing Law is economically unjustified and ineffective. The document lacks principles of a socially responsible state, because healthcare is becoming less accessible, which will likely worsen public health indexes, says Kustība Par! political party.

Branded «aggressor state», Russia says Ukraine buries Minsk peace agreements

As the Donbas War continues, the parliament of Ukraine has passed the so-called Donbas reintegration bill after three days of debates defining territories controlled by pro-Russian separatists in the east of the country as temporarily occupied by Russia.

Newest comments

Would you be ready to boycott something in your life?

View Results

Loading ... Loading ...

Polls Archive

Category feed: Feed: