Latviski English По-русски
Friday 23.02.2018 | Name days: Haralds, Almants

Economic diary. SRS to make ‘face control’ strict for debtors

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RURecently published indexes for Q1 2014 do not suggest an unambiguous assessment of the development of Latvia’s economy: the decline in manufacturing stands next to retail trade growth and positive indexes of tax collection.

The general decline in manufacturing this March was 1.6% in comparison with March 2013, as reported by Finance Ministry. The decline in gas and heating sector (-19.2%) may have had an impact on general results, which can be explained with the unusually warm winter.

Some processing industries demonstrate growth

As expected – some manufacturers are suffering losses from the geopolitical conflict involving Russia and Ukraine. Those who focus on exporting goods to the west, on the other hand, continue to increase export volumes.

In general, Latvia’s processing sector demonstrated growth of 3.9% this March. In spite of the decline in the first two months of 2014, Q1 demonstrated growth of 0.3% in comparison with the same period of 2013.

It is also worth mentioning the most positive of recent news: two of the most important segments of Latvia’s national economy – food and wood processing sectors – demonstrated the highest growth. In comparison with March 2013, these two sectors of national economy demonstrated increase of turnover of 4.5% and 10.2% respectively in March 2014.

At the same time, however, Finance Ministry warns that approximately 54% of exports of food products are sent to Russia. Therefore, it is possible that there may still be decline in this sector. Wood processing industry, which exports goods mainly to Sweden, the UK and Germany, remain in a more beneficial position.

Metal processing and production sectors also show decline in production output – yearly decline is reported to be 79.5%. Experts note problems with the largest players in this sector – insolvency of Krāsainie lējumi and turnover declines of Dīlers.

Producers await demand to bloom in Europe

Clothes and textile producers also demonstrate negative growth rates: decline of these two sectors this March in comparison with that of 2013 was 17% and 1.6% respectively. The reason for depression is the current situation in the main export market – Russia.

Economic mood index (compiled by European Commission every month) has been growing since May 2013. This shows that entrepreneurs and residents remain optimistic. This mood allows experts to predict an increase of economic activity in the EU and, possibly, growth of external demand, which will undoubtedly positively impact production and export of Latvian goods. This trend is confirmed by the index of optimism of Latvian manufacturers, which is reported to have increased this April.

Consumers do not react to geopolitical events

Retail trade shows positive dynamics: a comparison of indexes for March of 2013 and 2014 demonstrates turnover growth of 3.8%. Experts from Finance Ministry believe the decline in the first couple of months can be explained with consumers being careful after the introduction of euro.

‘Following the continuation of economic growth, there was also an increase of tax collection in Q1 2014. This index complies with the planned level,’ – as reported by Finance Ministry.

Compared to the same period of 2013, the state budget’s revenue for Q1 2014 declined by 0.5%. Costs, on the other hand, increased 1.5%. Meanwhile, collected taxes had increased 5.4% during this period, and this index complies with the level planned by the Finance Ministry.

The largest increase in collected amounts is noted with VAT (EUR 48.1 million or 12.9%), real estate tax (EUR 18.4 million or 33.6%) and social insurance payments (EUR 19.4 million or 3.9%).

In general, Finance Ministry notes that the complicated geopolitical situation in neighbouring regions did not negatively impact state finances in the current quarter of the year. Nevertheless, the ministry has reduced the country’s economic outlook from 4.3% to 4.0%.

Debtors will not be allowed to do business

Legislators continue tightening regulations aimed at reducing shadow economy and improve tax collection.

Starting with July 1st, 2014, all persons that have debts before the state budget will be added to the list of suspicious (or risk group) persons compiled by the State Revenue Service. Those added to the list will no longer be able to use a long list of services provided by the Enterprises Registry. Among the list of restrictions is the prohibition on starting new commercial structure, adding notes to the commercial registry about existing enterprises and its officials.

Changes to legislation are provided by amendments to the Taxes and Duties Law that will come into force on July 1st.

Therefore, SRS will have the authority to add a person to the list if:

-the person has accumulated debts above EUR 7,000;

-the person or the organization the person is part of has tax debts worth more than EUR 15,000.

The regulation regarding the list of suspicious persons has been active since January 1st, 2014.


Leave a reply

Trade union worried teachers may not have time to prepare for new education content

Teachers may not have enough time to prepare to work with new education content, said manager of Latvian Education and Science Workers' Union Inga Vanaga in an interview to Rīta Panorāma programme of LTV.

Judins, Loskutovs, Čigāne and Dālderis to continue working in Unity’s faction

Saeima members Andrejs Judins, Aleksejs Loskutovs, Lolita Čigāne and Ints Dālderis will continue working in Unity’s faction and coalition.

Saeima supports member’s proposal to publish wages of Bank of Latvia employees

Latvia’s parliament has decided to support Ints Dālderis’ proposal to publish wages paid to employees of the Bank of Latvia, education institutions, as well as municipal capital associations.

More snow expected on weekends; air temperature to drop even more next week

On the night to Friday, 23 February, air temperature in most of Latvia declined to -21° C… -27° C. It was only warmer in Kurzeme and some parts of Vidzeme, as reported by Latvia’s State Environment, Geology and Meteorology Centre.

SEB Bank: more employment options will open up and workers will become more selective

«It is becoming easier to change jobs nowadays. The largest selection of employment options are found in regional centres and cities, especially Riga and Pieriga. We see fewer employment options in regions even though there is still considerable demand for workers there,» predicts SEB Bank’s macroeconomics expert Dainis Gašpuitis.

ABLV Bank’s manager claims the bank is ready for cancellation of payment restrictions

ABLV Bank is ready for cancellation of payment restrictions, said the bank’s chairman Ernests Bernis during a press-conference on Thursday, 22 February.

62.9% of Latvia’s population was employed in 2017

Compared to the year before, in 2017 employment rate grew by 1.3 percentage points and number of employed persons by 1.5 thousand. Employment rate among men grew faster than among women – by 1.6 percentage points and 1.0 percentage points, respectively. 894.8 thousand people or 62.9 % of Latvia population aged 15–74 were employed in 2017.

Lithuania and Latvia: the tale between two sisters marked with rivalry

Relations between Lithuania and Latvia, two tight-knit Baltic neighbours, may exemplify a sisterly relationship from the first sight, but just over the course of a single week, several pings rang, signalling that rivalry is, and has always been, a component of coexistence.

Lembergs unable to organize his private life because of intense court proceedings

Lembergs unable to organize his private life because of intense court proceedings

Unemployment level in Latvia decreased to 8.7% in 2017

85.4 thousand people aged 15–74 in Latvia were unemployed in 2017. Compared to 2016, the number of unemployed persons has dropped by 9.9 thousand or 10.4 %.

Council member: ECB is openly dissatisfied with restrictions imposed on Rimšēvičs

The European Central Bank (ECB) is openly dissatisfied with restrictions imposed on one of its council members – governor of the Bank of Latvia Ilmārs Rimšēvičs, said council member of the Bank of Latvia Edvards Kušners in an interview to 900 seconds programme of LNT.

Defence expenditures in Latvia planned at EUR 234 million in 2018

Latvian government plans to spend EUR 234 million on defence projects, including procurement of transports, ammunition, armaments and individual equipment, in 2018 as confirmed by Defence Ministry.

Ministry cancels mandatory procurement component permits for five CHP plants

Latvia’s Economy Ministry has made a decision to cancel the permit to sell electricity within mandatory procurement component for five other renewable energy co-generation plants plants: SIA Madonas Eko, SIA Eiro-Āzijas investment agency, SIA EVOKEM, SIA M Parks, and SIA Eco Latvis.

NSC proposes Maizītis for a second term as Chief of Constitution Protection Bureau

Members of Latvia’s National Security Council have decided to propose the current head of the Constitution Protection Bureau Jānis Maizītis for another term at the helm of this institution, as BNN was informed by the State President’s Chancellery.

Latvijas gāze’s subsidiary Gaso proposes reducing gas transmission price

Latvijas gāze’s subsidiary Gase has turned to Public Utilities Commission with a proposal for a new natural gas transmission system service’s tariff project, providing for a reducing gas transmission price by 18-46% for more than 95% gas consumers.

FCMC invites Bank of Latvia to provide ABLV Bank with yet another emergency loan

The Finance and Capital Market Commission (FCMC) has invited the Bank of Latvia to issue ABLV Bank another emergency loan.

Crime rate in 2017 was the lowest in Latvia’s history

Last year’s crime rate turned out the lowest in Latvia’s history, as reported by Prosecutor General Ēriks Kalnmeiers in his annual report.

LEC: government priorities should include searching for causes and solutions, not the guilty

Latvian Employers’ Confederation (LEC) is worried about ongoing events and their negative effect on the stability and future development of the country’s economy. LEC believes that stabilization of the financial situation requires careful coordination of actions between institutions and the government.

Producer price level in Latvia grew 0.9% in January

Compared to December 2017, level of producer prices in Latvian industry rose by 0.9 % in January 2018. Prices of products sold on the domestic market went up by 1.2 % and prices of exported products by 0.6 %.

Latvian President believes country’s financial system is stable; prime minister plans to report to European Council

«Latvia’s financial system is stable, and there is no reason to worry about possible instability of the banking system. Banks continue working as usual,» says the President of Latvia Raimonds Vējonis.

Corruption Perception Index in Latvia experienced no major changes in 2017

Latvia’s positions did not improve much in Transparency International’s compiled Corruption Perception Index 2017, said Delna – Society for Openness acting director Liene Gātere in an interview to Rīta panorāma programme.

Latvian citizens arrested in Britain under suspicions of organizing slavery

Five people were arrested in a joint international operation by Latvian and British law enforcement operatives, as confirmed by Latvian State Police.

Opinion: Russia is trying to use the situation to create chaos in Latvia

Russia is trying to use the established situation to create chaos in Latvia. Efforts, however, are fated to fail, says chairman of Saeima’s Defence, Internal Affairs and Corruption Prevention Committee Ainars Latkovskis.

Dismissal requested for Latvia’s Finance Minister; parties worried about finance sector sinking deeper

Latvia’s Finance Minister Dana Reizniece-Ozola has failed to prevent the decision made by United States Department of the Treasury, which is ruinous for the country’s financial sector and humiliating for its reputation, says chairman of New Conservative Party Jānis Bordāns.

Defence Ministry: a massive information campaign is being realized against Latvia

Considering events of the last several days in the country’s banking sector and the arrest of the governor of the Bank of Latvia – Ilmārs Rimšēvičs – it is entirely possible that someone is currently realizing a massive information operation. Its structure and execution is not unlike the one observed in USA, France and Germany during the pre-election period, BNN was told by Latvia’s Defence Ministry.