bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 23.07.2018 | Name days: Magda, Magone, Mērija
LatviaLatvia

Economic Diary of Latvia. This year will prove to be worse than anticipated

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBank of Latvia has reassessed its outlook on the development of the national economy in 2015: it is very likely that economic growth in Latvia will become even slower and will be 2%, which is largely because of geopolitical situation and global economy.

The outlook has been reassessed because there have been no improvements to the geopolitical situation and the region remains under negative economic influence. This includes Latvia.

Lately there have been serious risks that Russia’s economy could decline even more, which would undoubtedly have a negative impact on Latvia’s national economy, because of the decline in demand for Latvian goods and services and reduced development rates of other trade partners of Latvia, as believed by the bank’s analysts.

Current outlooks have been compiled based on the assumption that Russia’s economy will decline by approximately 5% in 2015. Analysts nonetheless warn that the situation is rather dynamic and that it is possible that the recession in Russia may be even more serious than expected.

Furthermore, other factors could have a negative impact on Latvia’s economic development. This includes weaker than expected economic development in Eurozone, weak crediting, low level of trust among entrepreneurs, etc.

Nevertheless, there are also factors that could have a positive effect on economic development in Latvia: recovery of KVV Liepājas metalurgs and the decline of oil prices (the latter would have a positive effect on Latvia and Eurozone).

Micro-enterprises tax to be changed

Saeima has given green light for amendments to the Enterprises Tax Law: deputies of the parliamentary National Economy Committee have conceptually approved the proposal to maintain the current tax rate of 9% of turnover, but only for the first three years for enterprises that pay micro-enterprise tax.

According to this initiative, this rate will be applied to enterprises with annual turnover of EUR 7,000.01 to EUR 100,000. Starting with the fourth years of business activities, the tax rate will be 12% of turnover.

Entrepreneurs have thoroughly criticized the previous amendments, stating that high tax rates would ruin the very concept of micro-tax.

As a result, in response to the outrage from voters, legislators have decided to write new, entrepreneur-friendly legislative amendments. ‘Amendments will allow us to maintain a beneficial tax environment for micro-enterprises and beginner businessmen. It will also allow us to reduce the proportion of shadow economy,’ – as stated in the annotation to the draft.

The idea of limitations for 9% tax rate was positively accepted in Finance Ministry. Minister Janis Reirs has noted that the state should give entrepreneurs the opportunity to test their skills and only join the established tax-paying order in the event of financial success.

The draft is to be reviewed by the parliament in three readings.

All the best for families with children

Citadele Bank and ALTUM financial development institution have signed an agreement document regarding state support programme aimed to assist families in efforts to acquire housing.

As part of this programme, young families with children will be able to receive mortgage loans in Citadele Bank concessional terms with a reduced down payment.

The maximum amount of financial support depends on the number of children in a family:

-if a family has one child, the amount of support will be 10% of the loan, but no more than EUR 10,000;

-if a family has two children, assistance will be equal to 15% of the loan, but no more than EUR 15,000;

-if a family has three of more children, assistance will be equal to 20% of the loan, but no more than EUR 20,000.

The size of the first instalment will also depend on the number of children. Families with three or more children will be able to receive mortgage loans with the first instalment of 5% (10% for families with two children and 15% for families with one child).

«As part of the state programme, families with children will be able to receive mortgage loans with significantly reduced first instalments and bank funding of up to 95% of property value,» – says head of Citadele Bank’s Private Lending Office Baiba Tetina.

According to the representative of the bank, current mortgage offers provide for first instalments of no less than 25% of property value. This means that a family would need to pay a first instalment of EUR 15,000 in order to buy an apartment worth EUR 60,000.

«Unfortunately, purchasing power of Latvian families that have children is not high enough to afford such a large first instalment and pay rent at the same time,» – concludes Tetina.

Initial funding of the programme is EUR 332,678, which will allow the state to issue guarantees worth a total of EUR 1.33 million.

Latvian ports increase their cargo turnover

In spite of the intense geopolitical situation in 2014, Latvian ports managed to transship 74.176 million tons of cargoes – 5.2% more than in 2013, as reported by Transport Ministry.

Riga Freeport was the most active in increasing its cargo turnover – its results reached 41.081 million tons at the end of 2014 (+15.8% since 2013).

Liepaja Freeport’s turnover had increased by 9.5% (5.3 million tons) in 2014.

Ventspils Freeport, on the other hand, had experienced a decline of cargo turnover: annual turnover declined by 8.9%, down to 26.206 million tons.

Among the five small Latvian ports, the largest turnover of 2014 was noted in Skulte – 742.4 thousand tons (+8.6%), followed by Mersrags – 483.6 thousand (+23.4%) and Salacgriva – 332.4 thousand tons (+12.9%).

Ref: 017.109.109.6373


Leave a reply

Nearly 10% of HIV infected in Latvia are youngsters

Latvia is currently the leader among newly uncovered HIV cases in Europe. On top of that, nearly 10% of all HIV infected are youngsters, says public health specialist Baltic HIV Association member Anda Ķīvīte.

In pictures: Large wildfires in Sweden continue

In Sweden, record summer temperatures and weeks without rain have caused series of wildfires across the vast country.

Lursoft: catering sector in Latvia – how much industry leaders earn and pay in taxes

Using a study and compiling data on companies’ business activities for the past three years, Lursoft wanted to find out if it is true catering companies in Latvia work with losses, and what their tax contribution is.

Shooting attack in Canada claims lives

A shooting attack has taken place in Toronto, Canada, with two people having been killed died and 13 others injured.

Farmers in Estonia active in Open Farm Day

Estonian farmers have held their fourth Open Farm Day as over 250 farms in the Baltic country invited everyone interested to experience growing and making of domestic food and agricultural products.

Police commence investigation of an offshore network owned by Lembergs’ daughter

Latvian State Police has commenced an investigation following journalists’ publication of materials about an offshore network owned by suspended Ventspils Mayor Aivars Lembergs’ daughter.

Polish Sejm rushes to change defiant chief Judge of Supreme Court

Poland's legislators have passed rules to hasten the changing of a new Supreme Court chief as part of far-reaching judicial reform that has been criticised by the European Commission among others.

Heat wave to continue in Latvia along with thunderstorms and heavy rain at times

The heat wave active in Latvia will not back off this week – days will remain hot and night-time air temperature will not drop below +20° C. Heavy rain and thunder will be observed nearly every day this week, according to Environment, Geology and Meteorology Centre.

Bulgarian parliament opposes readmission of migrants from EU countries

Bulgarian parliament prohibited the its government from signing bilateral agreements with other European Union member states on readmitting migrants first entered the bloc in Bulgaria.

Week in Lithuania. Liberals ex-leader fails to recover confiscated cash

Eligijus Masiulis, a former Liberal Movement leader on trial in a major political corruption case, has failed to recover cash that was found and seized during searches of his home.

BNN summary of the week: open presidential election in Latvia and no more plastic bags for shoppers

BNN offers a summary of this week’s topical news in a variety of categories: Future; Change; Fight; Decline; Business; Progress.

SRS: cash register reform still stagnates, but has become much faster than it was last year

The cash registers reform continues stagnating. However, it has become much faster than it was a year ago, as reported by State Revenue Service.

Specialists to search for solutions to topical environmental problems in Ventspils

On Friday, 20 July, a meeting was held between Ventspils Commercial Port representatives and specialists from State Environment Service.

Children with functional disorders to receive services financed by EU funds

Child invalids will have access to social services intended to improve their social skills and mobility. More than EUR 4.2 million has been allocated for this goal from the European Social Fund, as confirmed by Latvia’s Central Financing and Contracting Agency.

Producer price level in industry up 4.3% in Latvia

Compared to June 2017, the average level of producer prices in Latvian industry increased by 4.3 % in June 2018. Prices of products sold on the domestic market rose by 4.8 % and those of exported products by 3.7 %.

Total tax debts in Latvia in July – 1.212 billion euros

At the beginning of July total tax debts in Latvia, including outstanding debts, halted debts and debts applied with repayment term extensions, accounted for EUR 1.212 billion, which is 0.8% less than a month prior, according to data from the State Revenue Service.

Survey: every third Latvian resident has received illegal loan offers

Nearly every third resident in Latvia or 31% of respondents admit having received offers to use illegal loan services, as concluded in a survey performed by Latvian Alternative Financial Services Association and SKDS.

Libya opposed to EU's idea to establish migrant centres in North Africa

Libya is against the solution of the European Union to set up migrant centres in the North African country as a means to keep migrants from arriving in the bloc and Libya would not be convinced with financial support, its Prime Minister Fayez al-Sarraj has noted.

Arrest warrant on Catalan ex-President cancelled by Spain

The Supreme Court of Spain cancelled a European arrest warrant for former Catalan regional leader Carles Puigdemont, as Germany refused to extradite him to face accusations of rebellion for declaring the independence of Spain's region, Catalonia in 2017.

Latvian government plans to allow handing expired food to charity

Latvia’s Agriculture Ministry has prepared amendments to the Law on the Supervision of the Handling of Food that provide permission to hand over certain types of food products to charity after the end of their expiry date.

Estonian industrial producer prices up 2.9% since June 2017

Estonian industrial producer price index has risen by 2.9% between June 2017 and the first summer month this year, resulting in an increase of export prices as well, Estonian statisticians have estimated.

Putin urges NATO to quit «irresponsibly» developing ties with Ukraine, Georgia

Russia's President Vladimir Putin cautioned NATO against developing deeper relations with Ukraine and Georgia, evaluating such a policy was irresponsible and would have consequences for the military alliance.

Latvian parliament not in a hurry to support president Vejonis for a second term

Political parties represented in the Saeima are not eager to support President Raimonds Vējonis for his remainder for a second term.

Weather in Latvia will remain warm and even hot at times

Weather in Latvia in the nearest couple of days will be dictated by a cyclone. Because of that the sky will be partially covered by clouds; thunderstorms are also expected, as reported by State Environment, Geology and Meteorology Centre.

Hungary sued in EU Court for criminalising help to illegal immigrants

The European Union's executive body has stated that a law in Hungary that criminalises support for illegal immigrants is in breach with EU law and Hungary has now been referred to the European Court of Justice for the alleged non-compliance.