bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Tuesday 12.12.2017 | Name days: Otīlija, Iveta
LatviaLatvia

Economic Diary of Latvia. Switching summands sometimes results in a different sum

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe decision of the British population to leave the European Union will remain topical in the world for a long time. And although the ‘farewell letter to Brussels’, as noted by Chairman of European Commission Jean-Claude Juncker, will not be sent by Britain until autumn and no new government will be formed until then, economists, experts and analysts are already engaged in calculations of the possible damage that will be caused by Britain’s exit.

Belgium, Netherlands, Ireland, Cyprus, Luxembourg and Malta will likely suffer the most from Brexit, according to experts from Fitch. Goods form those countries form around 8% of Britain’s imports. In the event of London establishing import fees, financial losses will be unavoidable for continental Europe. Furthermore, Cyprus, Malta and Netherlands all serve as Britain’s internal offshores. Britain is a financial hub for all of Europe. These countries service a large number of tax optimization transactions.

It is possible that Poland, Hungary, Czech Republic, Lithuania and Latvia will suffer losses as well. This is why there are a lot of migrant workers in Britain who arrived from those countries. Half of the income those people earn in Britain they also send to their home countries. Households in those countries will likely lose their usual income. According to estimates, it could be a massive hit: nearly 10% of GDP of those countries is secured by compatriots working abroad.

According to data from the Latvian Employers’ Confederation, money transfers from Latvians living abroad have had positive impact in supporting Latvia’s economy. From 2005 to 2015 the volume of such transactions were reaching 7% of GDP. 2014 turned out a record year – Latvian migrants transferred not only the largest sum of money since the opening of borders (EUR 717.5 million), but also managed to end up on 1st place among Europeans in terms of the total volume of money transfer ratio to GDP (nearly 6%).

According to information from the Foreign Affairs Ministry, which claims there are 370,000 Latvians living abroad, it can be assumed that the average level of money transfers to Latvia per capita is nearly EUR 1,900 per year or EUR 150 per month (in 2015).

Even now Latvians working abroad are complaining about intolerance coming from local residents. And even though promises are voiced on the highest political level to prevent any forms of discrimination towards migrants, many may decide to return to their home country due to pressure from locals.

This, however, would impact Britain’s economy the most. Shortly after the referendum Fitch reduced the country’s sovereign rating from AAA to AA. Even before that S&P had reduced Britain’s rating from AA+ to AA.

On the eve of the referendum, The Society of Motor Manufacturers and Traders of Britain announced that Brexit may result in around 800,000 people losing their jobs and the economy would lose around GBP 15.5 billion.

According to the head of the European Central Bank Mario Draghi, Britain’s decision will cost Eurozone 0.3-0.5% of GDP.

Russia will continue its «diet»

Political perspectives and economic future of the EU after Brexit was discussed by European leaders this week. Brexit discussion took the entire meeting even though EU leaders had also planned to discuss the matter of extending sanctions against Russia (in force until 31 July). The decision on the latter was made on 1 July.

Meanwhile, President of Russia Vladimir Putin decided not to postpone anything and simply issued a decree to extend the standing embargo on imports of agricultural products until 31 December 2017. This means USA, EU, Canada, Australia, Norway, Albania, Montenegro, Iceland and Lichtenstein will not be able to export goods like beef, pork, poultry, fish, cheese, milk, fruits and vegetables, as well as some other categories of products to Russia.

Earlier Latvia’s Agriculture Ministry prepared reports, according to which non-compensated losses of Latvia’s dairy industry would reach EUR 132.7 million by the end of the year. If sanctions are extended for the next 3.5 years, however, losses will reach EUR 233.5 million.

«We will leave for the North»

As we all know, Latvians are not all that intimidated or surprised by anything these days: they will always find a way out. While some are looking for happiness in other countries, others manage to return home from working abroad every evening. As it became known this week, 40% of Latvian would relocate to Estonia for higher salaries and friendlier taxes. This is shown by results of a survey by cvmarket.lv.

Previously there was some information that suggested more and more Latvians go to work in Estonia. Estonians, on the other hand, more often travel to Finland with the same goal in mind.

Residents from Vidzeme, which borders with Estonia, more often look for jobs in the neighbouring country. Residents of Valka are the luckiest in this regard – Estonia is just around the corner for them. Latvians find jobs in Tallinn, Pärnu, Tartu and nearby areas. Tallinn office of Ericsson employs Latvians. This example is followed by Scarfil from Pärnu, Finmec from Maardu and others. Enics branch in Elve also organized transports of its Latvian employees from Valga.

Latvians are interested the most in wages offered by Estonia: the average wage in this country was EUR 1,045 in 2015 (EUR 829 in Latvia). Latvians are also attracted by work culture and employers’ attitude towards their workers.

Transports of labour force between Valka and Valga are similar to a pendulum: people travel from Latvia to Estonia to work and return every day. Latvians do not change their residence. This could change soon because the interest of Latvia’s for real estate in Valga increases every year.

It is possible that Estonia may take Britain’s place in regards to Latvian migrant workers’ top destination.

Ref: 017.109.109.5791


Leave a reply

Countryside tourism may be threatened by unfair competition

Countryside tourism businesses are threatened by unfair competition and growing bureaucracy, as emphasized by Latvian Countryside Tourism Association Lauku ceļotājs after discussing this season’s results at four regional business seminars.

Estonia fights marginalisation pushing for relocation of 13 institutions to regions

As Estonia seeks to relocate part of government agencies out of the capital Tallinn, Estonian government ministers have been reminded that by the middle of January an action plan is required from them on the relocation of the central offices of 13 Estonian state institutions.

Finance Ministry: exports of goods reached a new record in October

The volume of exports continued growing in November, reaching EUR 1,070,600 at the end of the month and setting a new record for exports for one month’s time. This export index is the highest in the history of statistical records in Latvia, Finance Ministry stated in its report, commenting on data from the Central Statistical Bureau.

Heavy snow in Western Europe causes transport troubles

Heavy snow in Benelux countries, as well as in Germany and the UK has prompted hundreds of flight cancellations, while car accidents have caused traffic jams on roads.

Amnesty International: EU governments know about migrant torture in Libya

Governments of European Union member states are aware of torture and abuse of refugees and migrants in Libya, Amnesty International has stated, insisting that trying to reduce migration, the EU is actively financially supporting a «system of abuse and exploitation» on the Mediterranean coast of Libya.

State Environment Service applies fine to Nordic Recycling for unprocessed waste

Latvian State Environment Service (SES) has finished reviewing reports submitted by Nordic Recycling on waste processing system’s function last year. The conclusion has been made that Nordic Recycling electrical appliances processing system does not comply with requirements set by regulations.

SEA: unemployment in Latvia reached 6.7% in November

The registered unemployment level in Latvia grew to reach 6.7% in November, which is 0.1 percentage points higher than in October, according to information compiled by the State Employment Agency (SEA).

Riga’s Vice-Mayor denies Ainars Šlesers acted as his «task master»

Vice-Mayor of Riga and chairman of Riga Freeport Andris Ameriks denied during a meeting of the Saeima’s Investigative Committee on Monday, 11 December, that former politician Ainārs Šlesers acted as his «task master».

Foreign trade turnover in Latvia up 10.3% in October

In October 2017, Latvian foreign trade turnover amounted to EUR 2.31 billion, which at current prices was 10.3 % more than in October 2016, of which the exports value of goods was 9.7 % and imports value of goods was 10.9 % higher.

Businessmen: labour force deficit already exists; foreign students should be integrated in labour market

61.2% of businessmen in Latvia already experience problems with finding qualified workers. More than one-fifth of them expect difficulties in the near future. 79.7% of interviewed entrepreneurs said they support the idea of integrating foreign students in Latvia’s labour market, as concluded in data from a survey performed by Latvian Chamber of Commerce and Industry (LCCI), interviewing 225 businessmen.

Commissioner: EC offers support to member states that wish to join Eurozone

European Commission offers additional support to EU member states that wish to join Eurozone, says EC Vice-President for Euro and Social Dialogue Valdis Dombrovskis.

Estonia to continue five school break schedule until 2021

Estonian Ministry of Education and Research has arrived at and published the dates of school breaks for three school years to come and has promised uphold its new system of five breaks instead of the historical schedule of four.

How much does violence against women cost Latvia?

The costs associated with partners’ violence against women in Latvia reach EUR 442 million a year, says Welfare Ministry’s Child and Family Policy Department’s senior expert Viktorija Boļšakova with reference to data from European Institute for Gender Equality (EIGE).

De Facto: company responsible for Rail Baltica project involved in a fraud case

The company owned by the new head of Eiropas Dzelzceļa līnijas Andris Linužs is involved in a criminal process regarding fraud and document forging when receiving state funding for procurement of wind turbines. The committee that picked Linužs for the important post was not aware of this fact, as reported by De Facto programme of LTV.

French salmonella outbreak prompts recall of Lactalis baby milk formula

Baby milk powder producer Lactalis in France has made an international recall of its produce marketed globally under the Milumel, Picot and Celi brands after a salmonella outbreak in France.

Mayor of Riga: New Hanza business quarter to improve city’s development

During his visit to New Hanza business and residence quarter, Chairman of Riga City Council Nils Ušakovs said that every project of this kind improves the quality of life in the city, create new space for apartments and offices, jobs and public-access buildings, as well as pull up the quality of life in surrounding territories.

«European Oscars» dominated by satire drama «The Square»

The awards of the European Film Academy have been given to laureates at a ceremony in Berlin on December 9, where the joint production of Sweden, Germany, France and Denmark «The Square» dominated with six awards.

7.3% less cigarettes exported from Latvia in nine months of 2017

In the first nine months of 2017, roughly 1.9 billion cigarettes were exported from Latvia to other countries, which is 7.3% less when compared with the same period of 2016, according to State Revenue Service’s data compiled on excise goods circulation.

Weather in Latvia to be windy; air temperature to reach +9° C

On Monday, 11 December, air temperature in Latvia will be at -3° C… +2° C. It is expected to be somewhat warmer along the coast, however. Some precipitation will be present, as reported by State Environment, Geology and Meteorology Centre.

Ukrainian police detains Georgian ex-President Saakashvili

Police in Ukraine has over the weekend detained the ex-President of Georgia Mikheil Saakashvili on the same week, when a crowd of his supporters released him from a police vehicle.

Week in Lithuania. Vilnius mayor apologises for poor performance of road services

Vilnius Mayor Remigijus Šimašius has admitted that the road services of the Lithuanian capital city were not efficient enough in their response to the weather conditions, apologising to Vilnius residents for the inconveniences they encountered due to traffic interruptions.

BNN summary of the week: kebab industry’s fears, insiders in anti-corruption bureau, and Latvia’s crumbling roads

BNN offers a summary of this week’s topical news in a variety of categories: Fight; Fear; Opinion; Confusion; Truth.

Farmers Saeima: if Latvia does not ease rules for guest workers, there won’t be any workers

During a meeting of the Food Industry Council, the biggest discussions were raised about the matter regarding the lack of labour force in agriculture and food processing companies. On top of that, farmers are confused over Economy Ministry’s proposed solution, saying that it is too far from reality.

Ex-deputy chief of anti-corruption bureau: I have no doubt the prime minister and president dance to Lembergs’ tune

«For ten year now Aivars Lembergs has been under the ban to perform duties as chairman of Ventspils City Council. And for the same period of time Lembergs and state officials have been ignoring this ban. Environment Protection and Regional Development Minister Kaspars Gerhards, who is responsible for supervising municipalities and is very well-informed of the truce power centre, which, unfortunately, is not Latvian citizens as it is stated in the country’s Constitution, goes to visit Lembergs, not Ventspils. He does that to demonstrate his fealty to the ruler as he would if we lived in the Middle Ages,» says politician from New Conservative Party, councillor of Riga city Council and former deputy chief of Corruption Prevention and Combating Bureau Juta Strīķe.

Average consumer price level up 2.7% in Latvia

During 2017, the average level of consumer prices rose by 2.7 % when compared with last year. Prices of goods grew by 2.7 % and prices of services by 2.9 %.