bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 30.03.2017 | Name days: Nanija, Ilgmārs, Igmārs
LatviaLatvia

EM: growth of Latvia’s economy may reach 2.8% this year

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn spite of the tense geopolitical situation in the region, Latvia’s economy continued to grow in 2015. In addition to that, growth rates of the country’s economy increased in Q2 2015. As a result, economic growth of Q3 2015 reached 3.3%. Latvia’s GDP was 2.7% larger in Q3 2015 than it was the year prior.

Domestic demand continued to grow as well. Relatively quick rise of average wages and low inflation contributed to private consumption growth. Private consumption of the first three quarters of 2015 was 3.6% higher than that of the same period of 2014, as reported by Economy Ministry.

The level of investments was also 3.4% higher in the first three quarters of 2015 in comparison with the same period of 2014, which was largely due to an increase of investments in the country’s transport sector. A more rapid rise of investments was impacted by the general wait-and-see strategy of businessmen and the uncertainty among foreign investors. Public consumption continued to growl along with state budget expenditure in 2015.

Although export volumes to Russia declined significantly in 2015, the general level of Latvian exports increased to other countries. Exports of goods in actual prices were 1% higher in the first ten months of 2015 in comparison with the previous year. Exports to Europe increased 2.8%. The greatest contribution to export growth came from value growth of agricultural and food products. Exports of chemical products, mechanical appliances and electrical equipment increased as well. Exports were 25.6% lower to Russia and 6.4% lower to CIS countries in the first ten months of 2015 in comparison with the same period of 2014. Rapid decline of exports to the east was affected largely by the economic recession in Russia and the country’s partial restrictions on imports of certain food products. At the same time, it is worth mentioning that Latvia’s exports to third countries increased 15% in this period of time, which means Latvian producers have managed to find new export markets in spite of the complicated geopolitical situation and tension in the region.

Stable economic growth was noted in Latvia’s processing sector (3.9% in the first nine months), where the largest growth was noted in metalworking and woodworking sectors. Turnover of retail trade in Latvia continued to grow moderately well (5.7% in the first nine months).

Continued economic growth also had a positive impact on the situation on the labour market. The number of employed people in Latvia reached 902,000 in Q3 2015, which is 1.8% more than the year prior. Employed people make up 61.4% of Latvia’s residents aged 15 to 74. The most notable increase in the number of jobs was registered in the services sector – commercial services, health and social services, accommodation and catering services. The largest reduction in the number of jobs was noted in Latvia’s processing industry (food production and clothes production), construction and state administration. Latvia’s unemployment level was 9.7% in Q3 2015, which is 0.9 percentage points lower than the year before.

Latvia’s economic development will be tied closely to export expansion options next year. One the one hand export development dynamics will be limited by weak demand in CIS countries. On the other hand, export development will benefit from further expansion into Europe. Private consumption will continue growing, which is largely due to increasing wages in the country. Investments are vital for future economic growth. However, investment dynamics are expected to be slow at best.

Growth of private consumption in 2016 will contribute to the growth of industries aimed at Latvia’s domestic and external markets. Positive trends noted in processing industry will remain next year. Production output will continue to increase. In order to maintain growth rates in the country’s industrial sector, it is necessary for companies working there to diversify the range of goods they produce and explore new markets. Development of Latvia’s construction sector is expected to be slow. This sector’s development is closely tied to projects launched by EU funds.

The situation on the labour market will continue to improve in 2016; the number of employed people in Latvia may increase to approximately 903,000 people. With that, the country’s employment level could potentially reach 62%. Unemployment, on the other hand, could reduce to 8.6%.

It is worth mentioning, however, that competitiveness of Latvia’s economy will play a major role in future development. It is vital to find new and effective ways of improving economic growth further, raise Latvian companies’ competitiveness in their respective fields, raise the capacity of innovative technologies and business models, emphasizes the ministry.

Ref: 102.109.109.7345


Leave a reply

Caksa asked to refrain from illegal attempts to influence trade union

A letter has been sent to Healthcare Minister Anda Caksa, asking her to refrain from any attempts to illegally influence decisions of trade unions to refuse working extended work hours, as reported by Latvian Health and Social Care Workers Union.

Kucinskis wants to see Citskovskis in charge of State Chancellery because he has «bright eyes»

One of the strongest characteristics of Interior Affairs Ministry’s deputy state secretary Janis Citskovskis, who is a candidate for the post of director of State Chancellery, is the ability to form a strong and capable team, Prime Minister Maris Kucinskis said in an interview to 900 seconds programme in LNT.

Latvia’s largest taxpayers to be awarded for the twentieth consecutive year

On 30 March, the State Revenue Service will host the Large Taxpayers award ceremony. The festive event will be attended by Finance Minister Dana Reizniece-Ozola, SRS Director General Ilze Cirule and cooperation partners. Awards and certificates will be handed out to the country’s largest taxpayers in twelve nominations.

International credit risk insurer upgrades Latvia’s business risk rating

International credit risk insurer Coface has upgraded Latvia’s business risk rating to A3.

Mixer in U.S. suggests allies should be consistent in their messages

As the Baltic states foreign ministers met with the Speaker of the U.S. House of Representatives, the head of the Estonian foreign service emphasised the significance of consistency and clarity in messages by allies.

Circus support association claims signatures For Human Circus are fake

Riga Circus Support Association has submitted a request to State Police, Corruption Prevention and Combating Bureau and Saeima speaker to commence a criminal process in relation to signatures submitted to the Saeima by Animal Freedom.

Nordea economists: fate of Baltic States – prosperity or undue expensiveness?

Economic growth rate continues to speed up and become more balanced in all three Baltic States. Thanks to more rapid cyclic growth in Eurozone than expected and limited influence of political uncertainty on the global economy, Nordea Bank’s economists predict 3% growth in Lithuania and Latvia, and 2.5% growth in Estonia.

Georgia pleased with new visa-free travel to EU

After four and a half years of negotiations with the European Union, visa-free travel has entered into force for Georgian nationals travelling to the Schengen area, which has been marked by the Prime Minister of the Caucasian country with a trip to Athens and Brussels in a group of students.

Rinkevics invites USA to maintain presence in Baltic region

Strategic partnership between Baltic States and USA in the field of security and defence should continue, says Latvian Foreign Affairs Minister Edgars Rinkevics, inviting USA to maintain its presence in the Baltic region.

Delna: a possible conflict of interests identified in Healthcare Ministry

A possible conflict of interests has been identified in Healthcare Ministry. This conflict remains unresolved, as reported by Delna.

Risky births in Swedish regions prompt government to ensure maternity ward funding

Reacting to reports on risky births in remote places in Sweden, the country’s government has earmarked funding that would maintain the operation of smaller maternity wards and reopen closed ones.

Deputies propose forming a new Public Media Council, preserving NEPLP as a regulator

In a discussion, deputies emphasized the role of an efficient public broadcasters management model in strengthening the media environment, BNN was informed by Saeima’s press-service.

KNAB officers confiscate documents from Jurmala City Council

Corruption Prevention and Combating Bureau confiscated certain documents from Jurmala City Council on Tuesday, 28 March, as confirmed by the city council.

Trump suspends series of anti-climate change measures

Although the U.S. is one of the largest contributors to greenhouse gas emissions globally, the country’s President Donald Trump has issued an executive order aimed at suspending measures introduced by his predecessor in the post hoping to slow down climate change.

Natural gas reserves to be created in Latvia for energy crisis situations

Latvian Cabinet of Ministers supports the plan to entrust the creation of natural gas reserves to Conexus Baltic Grid, as BNN was informed by Economy Ministry.

Martins Bondars invites Riga residents to «topple» Nils Usakovs

Leaders of political parties Latvian Association of Regions and For Latvia’s Development believe the current Mayor of Riga Nils Usakovs is a real burden for the capital city’s development. This is why they have made it their main objective to «topple» Usakovs, as noted by Latvian Association of Regions.

Unity asks for assessment of Rail Baltica project for influence on Riga’s development

Unity’s representatives in Riga City Council Olafs Pulks and Nils Josts ask for an assessment of Rail Baltica project’s influence on the city’s development.

Latvian Defence Ministry signs agreement on cooperation in cyber security matters

As part of the E-skills week, Latvian Defence Minister Raimonds Bergmanis and President of Latvian Information and Communications Technology Association Signe Balina signed an agreement on cooperation in matters of cyber security.

Elvi and Aibe store networks form joint procurement group

Last week, two local Latvian store networks Elvi and Aibe commenced work on the creation of a joint company that would perform centralized procurements, as BNN was informed by representatives.

As UK readies to launch Brexit, interest in Estonian e-residency grows

A growing number of British citizens are applying for Estonian e-residency as the UK government plans to announce that the country will start leaving the EU later this week.

Expert: municipalities are incapable of attracting new residents

One way to increase budget revenue for municipalities is attracting new residents. This is a problem in Latvian municipalities, especially in Jurmala. «The city lacks cheap and accessible housing offers. This does not contribute to the attraction of new residents,» says real estate expert Jevgenija Dmitricenko.

Estonian gas seller: Excise duty hike unconstitutional

Estonian natural gas importer and seller Eesti Gaas has addressed the country’s Chancellor of Justice insisting that the increase of excise duty passed in 2016 was not in line with the rules of the Estonian constitution.

Bulgarian parliamentary election won by Borissov’s centre-rights

In the early parliamentary election of Bulgaria, the centre-rights led by the country’s long-time Prime Minister Boiko Borissov have won.

E-skills week to address the matter of digital security

Priorities of this year’s E-skills week include digital security and digital skills for employment and entrepreneurship, as well as e-services, comments vice-president of Latvian Information and Communication Technology Association Mara Jakobsone.

Strīķe: whenever contraband was associated with parties, SP put up all kinds of barriers

«I would never join any of the political parties that are currently in power,» said former official of Corruption Prevention and Combating Bureau and mayoral candidate from the New Conservative Party Juta Strīķe.