Reval Hotels
Pietari Express
 Observer Latvija SIA

WEEK 40.2005

Thursday, the 6th of October, 2005

What will happen to the Fatherland and us?
Latvian Prime Minister Aigars Kalvitis has informed press about business forecasts for 2006. Kalvitis believes inflation is driven up by the lack of competition between supermarkets and would like to see another supermarket chain in Latvia. The main priority for 2006 is the transparency of tax policy and removal of administrative obstacles; however, definite action is unlikely in 2006. Prices for gas and fuel will increase in 2006, and Latvenergo is planning to increase the prices for electricity, pointing out that they are the cheapest in EU. Kalvitis admits the fuel prices are increased by the ban on Russian and Byelorussian fuel that does not comply to EU regulations and says Latvia could relax the regulations if fuel prices increase beyond LVL 0.70.

Wednesday, the 5th of October, 2005

Prices will rise soon
On October 4, government has accepted the new natural resources law that will considerably raise several taxes – for electric and electronic equipment, for different packaging, and for using natural resources. Small companies producing building material from sand, dolomite and other resources could suffer, but the Ministry of Environment maintains the tax will be increased gradually, so the effect will not be too big. There have been worries that the increased prices will increase the use of cheaper Lithuanian building materials, but the increased fuel prices mean Lithuanians will have to increase their prices as well. Appliances and electronics could rise in price from 1 to 10%. The expected increase in price has driven up the sales of these products.
Dienas Bizness

Tuesday, the 4th of October, 2005

Salaries will grow faster than inflation
The human resources solutions company Fontes Latvija expects salaries could continue growing by 12–15% in 2006. The growth in 2005 was 16.2%. Fontes Latvija believes the salaries will continue growing until they reach the average European level, and that would happen no faster than in seven years. The fastest growth is for salaries of skilled workers: they have grown by 22%. Low-skilled workers had the average growth of 11%, and the slowest growth was for administration positions. The salaries in Riga have grown for 18%, outside Riga — for 19.5%.

Monday, the 3rd of October, 2005

How to keep the prices down
The Ministry of Finance has an extremely optimistic forecast: it believes inflation will be 4.5% in 2006 and 2.8% in 2007. The inflation at the end of 2005 is expected to be 6.4%. Ministry believes most of the factors that cause the inflation will become less influential, and introducing the right policy could bring the inflation to the expected numbers. Other financial experts are quite sceptical, though.

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