bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 23.03.2017 | Name days: Mirdza, Žanete, Žanna
LatviaLatvia

Economic Diary of Latvia. To tempt Brexit defectors

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia had the slowest growth of GDP among Baltic States in Q3 2016, according to the latest data from the Central Statistical Bureau of Latvia. Nevertheless, this does not seem to prevent Prime Minister Maris Kucinskis from hoping for GDP growth of 4-5% a year in the future.

Compared with the same period of last year, Latvia’s GDP grew 0.3% in Q3 2016 (by 1.7% in Lithuania and by 1.1% in Estonia).

In the first nine months of 2016, Latvia’s GDP grew 1.4% in comparison with last year. In actual prices it was EUR 18.2 billion, including EUR 6.431 billion in Q3.

The largest growth in Latvia was noted in the processing industry (+4%), manufacture of computers, electronic and optical devices (+22%), manufacture of machinery, mechanisms and vehicles (+13%) and manufacture of non-metallic mineral goods (+10%).

Declines were noted in the manufacture of clothes (-5%), manufacture of chemical substances and food products (-8%), repairs and maintenance of equipment (-11%). Construction output has declined 22% over the course of the year. The biggest decline was noted in the segment of engineering structures – by 36%.

The Organisation for Economic Co-operation and Development has reduced economic growth outlooks for all three Baltic States for 2016. According to OECD’s latest outlook, Latvia’s GDP will grow 1.1% in 2016.

Prime Minister’s optimism

Latest information from the Central Statistical Bureau of Latvia and OECD do not seem to bother Prime Minister Maris Kucinskis, as he expects Latvia’s long-term GDP growth to reach an astonishing 4-5% annually.

It is no utopia as long as objectives set in the government’s declaration and action plan are accomplished. These objectives include creating a competitive business environment and favourable investment climate, as well as developing strategic investment directions, Kucinskis mentioned in his speech addressed to members of the Saeima.

According to the prime minister, even Brexit can be positive for Latvia, but only if the country prepares accordingly for it. Kucinskis mentioned: an opinion was voiced shortly after Brexit that many companies registered in the UK may decide to relocate to other EU countries.

Foreign investors wishing to register companies in Latvia should be given an opportunity to fill all the necessary documents in English. Investors should also be given the option to fill all accounting documents in English as well, the prime minister said. In this context, the prime minister has also proposed allowing businessmen to pay taxes in any currency.

Unpleasant Micro-enterprise tax

It is a paradox of our time – Latvia’s government is prepared to consider the needs of everyone (foreign investors, refugees and other foreigners) except its own citizens, who live and work in Latvia all the time.

Amendments to the Micro-enterprise Tax Law and Law on State Social Insurance that could potentially kill off tens of thousands to small family enterprises are believed by ministers to be correct and worthwhile. Only opposition parties are trying to oppose them. The parliamentary factions of To Latvia from The Heart and Latvian Association of Regions have asked the president not to approve amendments for those laws.

According to the president’s advisor for law and legal matters Kristine Jaunzeme, the possibility for submission of amendments for a repeated review is being considered.

NSL notes that the parliamentary majority ignored the opinion of society by approving those laws. The party notes that men of the government are gradually becoming more like masters to Latvia’s slave population.

The party believes amendments to the Micro-enterprise Tax Law contradict not only principles of effective state administration and increase the general distrust towards the government but also breach Section 90 of the Constitution of the Republic of Latvia.

Latvian Association of Regions agrees that amendments contradict the Constitution and will lead to an increase of social benefit recipients. The faction had previously proposed cancelling those amendments, referencing Section 108 of the Constitution – the right of every person to freely choose their work. The party also referenced Section 107 of the Constitution – the right for every person to receive wages that are not below the country’s minimum.

According to the party, amendments mean a future full of uncertainty for employees and employers. The planned changes will painfully impact regions and small enterprises in which people are employed part-time. The government has no right to treat its residents in such a way, said Martins Bondars, chairman of LAR.

People will be forced to leave the market and join the ranks of benefic recipients or leave the country altogether. Businessmen, on the other hand, will be forced to relocate their businesses to other countries that do not have such restrictions, the party notes.

Profitable business

According to results of an evaluation of the compliance of banks’ internal control systems with American standards of prevention of money laundering and financing of terrorism, none of Latvia’s banks received excellent score, noted Maija Treja, spokesperson for the Finance Capital and Market Commission.

Consultants from USA had concluded their independent evaluation of customer service processes in 12 Latvian banks. The most serious problem and risk uncovered by experts in certain banks was that their internal control systems were insufficient to comply with the principle of independence.

Experts also found insufficient control over the study of clients’ business activities and the unjustified risk assessment.

Peteris Putnins, chairman of FCMC, has said that all Latvian banks should draw conclusions from results of this inspection. All of them, not just the ones engaged in non-resident services, should work hard to improve their internal systems.

Ref: 017.109.109.6712


Leave a reply

Officials support Finance Ministry’s proposals for medium-term tax strategy

At the 22 March meeting of the National Economy Council, members of the parliament decided to conceptually support Finance Ministry’s proposals for medium-term tax strategy.

Ameriks received nearly 200,000 euros from fast loan companies in interest pay

Vice-Mayor of Riga Andris Ameriks received income of nearly 200,000 euros in interest pay from fast loan companies 4finance and Mogo last year, according to the declaration for 2016 submitted to the State Revenue Service.

Estonia to reduce availability of plastic bags in shops

Having passed amendments to the Estonian «Packaging Law», the Riigikogu has adopted a plan to reduce the use of plastic bags in the Baltic country over the coming years.

Latvian businesses in Japan to be provided with stable tax payment regime

Latvia businesses working in Japan will be provided with a stable tax payment regime that will not be influenced by amendments to Japan’s tax regulations, as stated in Saeima’s report.

Multiple parties to gather in a single candidate list to compete with Lembergs

Latvian Association of Regions, National Alliance, For Latvia’s Development and Unity will start at municipal elections in Ventspils under a single candidate list, said the leader of this unified list Girts Valdis Kristovskis in an interview to Latvijas Avīze.

Reirs: ministry’s offered tax reform will change nothing for most pensioners

Finance Ministry’s offered tax reform will add only slight changes. Most pensioners will not feel any changes from this reform – neither good, nor bad, said Welfare Minister Janis Reirs in an interview to Rīta panorama.

Canadian ambassador: Latvia and Canada are closer than ever before thanks to CETA

«All Latvian exporting companies – those that already export goods to Canada and those that consider doing that – will benefit from the Comprehensive Economic and Trade Agreement,» says Foreign Affairs Ministry’s parliamentary secretary Zanda Kalnina-Lukasevica.

Expert: cargo transports through Iran offer a major step for international logistics market

Over the course of nine months, since Latvian logistics company Pro Logistic Services opened an office in Iran, the volume of cargoes and the number of serviced clients has grown by 15%.

Eastern Hospital’s Gynaecology Clinic to be provided with 500,000 euros to reduce queues

Riga Eastern Clinical University Hospital’s Gynaecology Clinic will be provided with funding of EUR 513,622 from the state budget to help reduce queues.

In pictures: Victims of Brussels’ terror attacks remembered in first anniversary

Remembering those killed and injured in last year’s terror attacks, remembrance events are held on Wednesday, March 22, in the Belgian capital.

Fourteen asylum seekers relocated from Greece to Latvia

As part of the European asylum-seeker resettlement programme, fourteen people in need of international protection were relocated from Greece to Latvia, as confirmed by a representative of Office of Citizenship and Migration Affairs.

Fiat Chrysler investigated over alleged breaking of emissions tests

French investigators have opened a probe into possible emissions tests breaking by the Italian-American car builder Fiat Chrysler Automobiles in relation to its diesel cars.

National Alliance does not support increased ticket prices in Riga shuttle buses

On Tuesday, 21 March, Riga City Council’s faction of the National Alliance voted against Transport Department’s proposal to set one ticket price for Rīgas mikroautobusu satiksme shuttle bus services – EUR 1.15.

Visitors will be allowed to take photos of documents stored in National Archive

To simplify the use of documents stored in Latvia’s National Archive, visitors will be allowed to take photos of documents for research and personal purposes, announces Culture Ministry.

Rimi Baltic commences construction of a major logistics centre in Riga

Rimi Baltic has commenced construction of a retail trade industry project in Riga. This project will attract investments of EUR 75 million and make Latvia a Baltic logistical hub, as BNN was informed by the project’s representatives.

EC motivates cities to switch to «smart» street lighting

Town and city governments in the European Union spent a total of around 7.6 billion euros on public street lighting in 2015, but the expenditure could be reduced by even 70% if local governments are willing to invest considerably in new lighting.

CC: largest amounts of Latvian milk are exported to Lithuania and Poland

After assessing the situation on the market after last year’s publicly voiced announcements regarding the possible price rise on dairy products, Latvia’s Competition Council has concluded – the price rise noted in the second half of 2016 was only temporary and is not expected to continue.

LMT installs the first mobile 5G connection station in Latvia

Latvijas Mobilais Telefons has installed the first 5G technologies compatible mobile communications station in Latvia, as confirmed by the company.

Kerry: Latvia has multiple advantages when compared with other countries

Latvia is an attractive place for investments. It has a great potential for foreign investments, comments U.S. Secretary of State John Kerry, who arrived in Riga this week to learn more about the situation in Latvia and consider investment options.

Prosecutors: information was leaked to the accused in Oligarchs case

The criminal process in the so-called Oligarchs case was launched by the Corruption Prevention and Combating Bureau with good reason, but it was ended abruptly because of lack of evidence. On top of that, information was leaked to the accused, as Diena was told by the prosecution’s representatives.

Modernising EU VAT – priority of Estonian EU Council presidency

Estonian Minister of Finance Sven Sester has stated that a priority of this year’s upcoming Estonian presidency at the Council of the European Union will be changing of the bloc’s value-added tax.

Latvian authorities help intercept major marijuana shipment in Mediterranean region

During a joint operation by Latvian and other EU navy and air forces, three high-speed crafts attempting to transport nearly three tonnes of marijuana were caught in the Mediterranean region.

Tuberculosis infection rates in Latvia remain some of the highest in EU

Tuberculosis infection rates in Latvia continue to decline. Nevertheless, specialists say that Latvia’s indexes remain some of the highest in the European Union, as reported by Centre for Disease Prevention and Control.

Cigane: Latvia is co-responsible for Eurozone’s economy; reforms are needed

«Latvia, as a Eurozone member state, is co-responsible for the economic situation in the European Union. We cannot afford to sleep on the laurels of rapid growth started in post-crisis years. Latvia has to be responsible in the realization of recommendations provided by the European Commission,» says chairperson of Saeima’s European Affairs Committee Lolita Cigane.

French presidential candidates defend opposing views in TV debate

With the April French presidential election nearing, two leading candidates of the post have positioned themselves in a televised debate.