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Wednesday 28.06.2017 | Name days: Kitija, Viesturs, Viestards
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Economic Diary of Latvia. Hunting pokemons

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUDevelopment rates of Latvia’s economy were the highest in Europe in Q2 2016, according to the Central Statistical Bureau of Latvia. This is one of many pieces of good news that came this week.

Latvia’s GDP grew 2.1% in comparison with the same period of 2015. Lithuania’s GDP grew 1.9% and Estonia’s GPD grew by 0.6%. In 2015, Latvia’s GDP growth comprised 2.8%. GDP growth of Estonia and Lithuania were 1.5% and 1.4% respectively.

In actual prices, Latvia’s GDP growth comprised EUR 6.3 billion and in comparative prices – EUR 5.4 billion.

And although GDP is below previous expectations, tax revenue fits the plan. The general situation with the budget is stable, Swedbank notes in its latest economic outlook. In spite of the decline in the volume of investments and the crisis in the country’s construction sector, the number of employed people in Latvia’s economy had increased in the first half of the year. Unemployment levels continue to drop, wages continue to grow and household expenditures continue to grow as well.

«Populism and geopolitical uncertainty remain a cause for concern, but the world economy continues to grow. This allows our exporters to develop and keep making money. Thanks to attraction of structural funds and more active investment environment, we predict 3% growth for Latvia’s economy in 2017. Growth of banks’ loan portfolios in 2018 may help Latvia’s economy grow 3.3%,» – said Swedbank’s head economist in Latvia Martins Kazaks

Who can expect wage growth?

Other expected growth surrounds the wage of the head of the State Revenue Service and some of this institution’s ‘key employees’. It is planned that the monthly wage of the director general of SRS will be EUR 4,030 with the possibility of bonus pay equal to 60% of the monthly pay.

Previously, Finance Minister Dana Reizniece-Ozola offered setting a maximum pay of EUR 8,100. The gross salary from this amount would be a little over EUR 5,000 and bonus pay – 60% of the monthly salary. At the moment, the salary of the head of the aforementioned institution is EUR 3,417 before taxes.

As part of a pilot project, it is possible wages of ‘key employees’ in SRS will increase as well. The government has approved this idea in order to later discuss the possibility of raising wages in the government.

According to results of a survey ordered by the State Chancellery, wages in government administration are not competitive with wages in the private sector. This situation may result in professional managers leaving their posts to seek better jobs in the private sector.

Here is an example of ‘highly qualified specialists’ the government could lose. SRS has finished viewing materials of the case regarding administrative violations committed by the head of the State Environmental Service Inga Kolegova. SRS has concluded that Kolegova’s declaration lacks detailed and factual information regarding any major transactions Kolegova has performed. It has been decided to pass materials of this case to the Corruption Prevention and Combating Bureau.

What is particularly curious is that Kolegova pulled her candidacy for the post of the head of SRS on the same day it was decided to pass materials to KNAB.

Hunting pokemons

Another controversial event took place this week in relation to the controversial dinner and hunt supposedly attended by Agriculture Minister Janis Duklavs in Lithuania.

On Monday, Lithuanian Agriculture Minister Virginija Baltraitiene publicly expressed her apology to Duklavs for the unfortunate problems he has had to face ‘because of paranoid fears in Lithuania, pokemon hunts and all kinds of interpretations’.

As previously reported, there was a dinner and hunt organized in Paneveza, Lithuania at the end of July. Janis Duklavs, who was in Lithuania at the time, had attended the dinner and hunt along with a delegation of officials.

Aside from the minister, this event had also been attended by the head of Lithuania’s Food and Veterinary Service Jonas Milius, his Latvian counterpart Maris Balodis, several other representatives of the aforementioned institutions, manager of Biovela Group Virginijus Kantauskas and the head of Dojus agro Petras Dailide.

Duklavs’ and Baltraitiene’s accounts about the dinner and hunt were contradictory. Lithuania’s minister claimed businessmen were invited by Duklavs, who denied doing that. As it turned out, the dinner cost EUR 300 and participants of the dinner ate Lithuanian national meal – cepelins.

In the end, caving under pressure from the press, Duklavs noted that he is fed up with answering ‘stupid questions’ about the dinner and hunt in Lithuania and offered to end the discussion altogether. It should be added that Duklavs had initially categorically declined his participation in the dinner and hunt organized in Lithuania. Later, however, he admitted taking part in both. He only added that he had no weapon with him. Latvian Prime Minister Maris Kucinskis has said that the minister’s communication with society has been very poor.

It is worth mentioning that this is the second scandalous dinner attended by Duklavs in recent months. As previously reported, he and two other ministers from the Union of Greens and Farmers – Finance Minister Dana Reizniece-Ozola and Transport Minister Uldis Augulis – had met with Russian Vice Prime Ministe Arkady Dvorkovich in secret. The informal meeting took place at Karavela fish processing plant in Riga.

Sometimes they return

The passing summer promises to be good for Latvia’s rural tourism, according to the head of Latvian association for rural tourism Lauku ceļotājs Asnate Ziemele. This industry’s turnover may grow by 10-15% this year.

According to her, this year’s summer has been very good. There are places in Latvia where 17 weddings were held. This means they were occupied not just on weekends, but on weekdays as well.

Both the number of foreign guests and local residents has increased in tourist accommodation facilities. There has also been an increase in the number of Latvians who return from abroad to travel in Latvia.

Ziemele also mentioned that the number of Russian and British citizens has declined. This, however, is compensated with the growing interest exhibited by Latvians coming from abroad.

Ref: 017.109.109.2663


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