||WEEK 50th 2003
Thursday, the 11th of December, 2003
GDP keeps up the pace
In the first nine months of 2003, the volume of the GDP increased by 7.4 percent, whereas in the third quarter by 7.3 percent. The trade increased by 11.4 percent during this time, manufacturing industry by 9.3 percent, transport and communications by 7.6 percent, and construction increased by 16.2 percent. According to the head of the Central Statistical Bureau, Aija Zigure, construction is a significant part of the GDP as it shows the overall level of economical uplift and welfare of a state. Ms. Zigure anticipates that the growth of the GDP could reach 7.5 percent to 8 percent by the end of this year. The GDP volume has decreased in the agriculture. Now it amounts to 4.3 percent. The volume of the agricultural production decreased by 4.3 percent in the third quarter. The retail increased by 13 percent. The trade amounts to 20.3 percent of the GDP. In the third quarter Latvia was the second in the growth of the GDP among the Baltic States. The first was Lithuania. The Ministry of Finance anticipates 6.5 percent increase of the GDP by the end of the year, whereas the Ministry of Economy believes that the GDP will increase by 7.8 percent.
Wednesday, the 10th of December, 2003
Government determines to introduce euro
On December 9, the Cabinet of Ministers decided that Latvia will satisfy all the criteria of Mastricht starting January 1, 2005, in order to join the European Economy and Monetary Union in 2008. Latvia fulfilled the requirements of Mastricht already in 2002, however, this year and in 2004, the inflation could be higher than it is allowed. The economists are also concerned about the high deficit of the state budget, however, the government intends to decrease it to the criteria of Mastricht as well.
Praises business environment
The Swedish entrepreneurs consider Latvia and Estonia the most advantageous export and investment markets in the Baltic Sea region. According to the survey of the Swedish Trade Council, it is most easiest to find a qualified workforce and to deal with bureaucracy in these two countries. The survey compared conditions of Lithuania, Latvia, Poland, Estonia, Russia and Ukraine. The Deputy Director of the council, Jan Carlborg, states that the criminality and corruption in the Baltic States is too exaggerated. The pluses of Latvia include the economical development, banking system, educated workforce, and gradual improvements in the transport flow between Latvia and Sweden. The problems are the slaw bureaucracy, difficulties in receiving certificates on different goods and products, bribe taking and corruption in different institutions. Nevertheless, the survey found no corruption in the administrative bodies of Latvia. Latvia has received the best evaluation in observance of the laws, investment friendly taxes and good communications.
Latvia outside the EU is of no interest to investors
In the end of the third quarter LVL 1.749 billion were invested in Latvia. The investments were made by 92 companies. Sweden made the majority of investments or LVL 237.936 million. The next largest investors were Germany, Denmark, Finland and the USA. The entrepreneurs shared that they are tempted by the geographical location of Latvia, its accession to the EU, liberal tax policy, as well as qualified and cheap workforce. The minuses are the high level of bureaucracy, corruption and the existence of shadow economy. The investments made in Latvia have increased by 37 percent in the last three years. 24.4 percent have been invested in real estate, 16.6 percent - in retail and wholesales, 16 percent in manufacturing industry, 14.9 percent in financial mediation, and 14.2 percent in transport and connections.
(Biznes & Baltija)
Tuesday, the 9th of December, 2003
In October, the manufacturing industry increased by 5.3 percent, compared to October of the last year and by 0.9 percent, compared to September. The production of vehicles has increased by 34 percent, the production of drinks by 31.9 percent, the production of rubber and plastic by 29.7 percent, the production of timber and wooden products by 18.8 percent, the production of equipments, mechanisms and labour machines by 16.6 percent, the production of non-metallic mineral products by 10.8 percent. Nevertheless, some production sectors decreased. The production of fish and fish conserves has decreased by 25.6 percent, the production of chemical substances and their products - by 19.3 percent, the production of textiles by 13 percent and the production of clothing by 10.4 percent.
Banks' assets exceeded EUR 20 billion
According to Latvijas Unibanka, in the ten months of 2003, the total volume of assets of the Baltic States' banks increased by 13.8 percent, reaching EUR 20.17 billion. Latvia had EUR 8.43 billion in assets, Lithuania EUR 5.84 billion and Estonia EUR 5.9 billion. 22 banks and one subsidiary of a foreign bank are currently operating in Latvia.
(Biznes & Baltija)
Baltic Weekly MonitorA