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Latvia Business News: Archive 2003-2006

WEEK 31.2006

Wednesday, the 2nd of August 2006

Believe it or not
According to a study of the Ltd Lursoft, which processes a database of the Register of Enterprises of the Republic of Latvia, in 2005 the total turnover of a group of selected enterprises increased by 37 per cent comparing to the previous year, however, the net profit of the group increased by 37.5 per cent. In 2004 the corresponding indices of the group were 17 and 28 per cent, but in 2003 – 12 and 33 per cent. Based on the data, analysts concluded that Latvia might reach the average level of the European Union economy by 2030.
Bizness & Baltija

Tuesday, the 1st of August 2006

Impact of the funds on inflation is obscure
The responsible institutions have not analyzed the impact on inflation of the European Union funds, which amount to 15 per cent of state spending in Latvia. Private sector analysts note the EU funds inject around EUR 1.5 million a day into the Latvian economy, an amount that must affect inflation along with other factors such as the expansion of credit and government spending in general. The Ministry of Finance spokesman Edgars Zagorskis said that a study of the impact of the EU funds on the Latvian economy was being prepared, and it would be ready in 6 to 12 months. However, Bank of Latvia press secretary Martins Gravitis expressed doubts that such a general macroeconomic study would be able to define the impact of these funds on inflation. Latvia is expected to get around EUR 5.7 billion from the EU funding over the next seven years. Economists say the annual amount, as much as EUR 650 million must have an impact on various aspects of the economy.
Dienas Bizness

The growth has many risks
The Ministry of Finance of Latvia forecasted that rapid growth of Latvia’s gross domestic product would continue at an average 7.5 per cent per annum. The forecast covers the years 2007 – 2009 and says that, at the same time, the state’s fiscal budget deficit will shrink. The study also sees risks to Latvian growth in a slowdown of exports if demand from Latvia’s main European trading partners decreases, or if inflation affecting prices of export dampens demand.
Dienas Bizness

Monday, the 31st of August 2006

Latvian business has handed out bribes worth EUR 213 million
The World Bank published the study on corruption, which informed that in 2005 Latvian enterprises paid EUR 213 to 228 million in bribes to the officials, which is approximately 5 per cent of Latvian budget’s income. In 2002 it amounted to EUR 170 million. 25 per cent of business companies said that corruption is the main hazard for the further development of their business, whereas in 2002 there were 30 per cent of enterprises in such an opinion. In 2002 almost 20 per cent of enterprises admitted bribing, but in 2005 it was 10 per cent. The study shows that even though the double entry bookkeeping is becoming less of a problem in Latvia and Latvian enterprises are becoming more reliable, the corruption among officials does not seem to cease, but in contrary – flourish.

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