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Economic Diary. Latvia 3rd week of 2012

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Amongst the events that transpired in the Economic life of Latvia in the period from the 16th to 20th of January, the following events are the most interesting:

Bank of Latvia bets on decrease

The Bank of Latvia (BL) has decreased the growth of GDP for 2012 from 2.5% to 1.3%. The decrease of the projection is due to the drop in external demand and as a result – the slowdown in the growth of export, – President of BL Ilmars Rimsevics explained.

Moreover, the Council of BL has decreased the norm for bank reserves by 1%. The norm for obligations for more than two years the norm is decreased from 3% to 2%, for every other norm from 5% to 4%. It is expected that the amount of money reserved by banks will decrease by approximately 153 million LVL. This decision was made based on the fact that, the inflations shows a tendency to decrease and does not threaten price stability. And bow, according to the BL, financial institutions can direct funds to companies as credits, and not keep that money frozen in accounts.

Population census results in Latvia makes specialists cry

According to preliminary data gathered and compiled since the population census of the 1st of March 2011 by the Central Statistical Bureau of Latvia (CSB), population count wa estimated to be 2 067 887 people. Before the publication of this data it was believed that 2 208 000 people live in the country. During 11 years that have passed since the population census of 2000, the number of people residing in Latvia has decreased by 13%, or 309 000. CSB believes that the reasons for this are natural death and migration of the populace.

The information published by the CSB became a reason for serious discussions. Demograph Ilmars Mezs believes that there is nothing to be happy about the fact that over 2 000 000 people live in Latvia. «If we do not solve the demographic problem, generation from now we should be happy about having 1 500 000 people living in Latvia, after that 1 000 000», – He states.

Swedbank Chief Economist Martins Kazaks is convinced that, the government should do everything they can so that country folk would move to large Latvian cities, instead of going abroad.

On the other hand the Ministry of Finance admitted that, the data from the population census show a very different picture, which is why the department is planning to review demographic projections that are fundamental to planning social budget in-depth.

Shareholder wars must be stopped

The Minister of Justice Gaidis Berzins plans to organize discussions with the goal to formulate new regulations of carrying out shareholder meetings in order to avoid any possible conflicts between enterprise co-owners. One of the most notable of such conflicts is the Ventbunkers transit enterprise, roster of both the Council and Board was changed a few times in a period of several days. The saddest fact is that, such wars tend to include not only a large number of lawyers, but government structures as well, such as the Registry of enterprises and Law enforcement.

Meanwhile it is suggested that the new regulation of carrying out full shareholder meetings, should include the rule that every member of the meeting should be approved by a sworn notary as well as a sworn bailiff should oversee the meeting. This way the Registry of enterprises, after receiving Minutes of the meeting authenticated with the signatures of a notary and a bailiff, can trust them more.

The right to recover debts will be charged

Companies that specialize in recovering debts will have to receive a special license. This is covered in amendments made to the Law of Taxes and Tolls, approved in the second hearing by the Finance-Budget Commission of Saeima.

According to the amendments, firms that specialize in recovering debts will need to receive a special license in order to function. The fee for this kind of license is 2500 restoration of the license will cost 1000 LVL.

The Ministry of Economy, where the amendments were developed, explained that the licensing of debt collectors is necessary for the cleanup in this business branch. Right now there is no full list of this market’s participants; the order of extrajudicial debt collection is not specified; and the protection of the rights of individuals from whom the debt is being collected is not ensured, as well as it is the reason for multiple complaints from citizens about the methods of how firms that specialize in recovering debts actually perform their functions.

A golf course will be built near Riga

About 30km from Riga, in Tinuzi area a golf course could soon be built. A corresponding application was sent to Territorial Council of Inskile by Ogres Golfa klubs partnership which rents the territory for the future golf course for 30 years from the Riga municipal enterprise of Rigas Mezi.

The arrangement provides for the settling of a golf course and any structure necessary for it, as well as cottages and guest houses.

Ogres Golfa klubs representative Maris Kurilovics said that, the project for the golf course has been worked on for two years now. 7 million EUR are planned to be invested in this project, construction works can commence after one and a half year.

It is expected that the new structure will get the attention of not only Latvian golf lovers but golf-tourists, which will be able to stay in the new complex for a few days.

Ref: 017.109.109.419


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