Latvia’s Economic Progress and Investment Challenges in 2022: Expert Analysis and Government Plans

Slow progress in the second half of next year will be possible. However, the President’s statement on reaching the European average standard of living by 2030 cannot be discussed with such figures.

The economist of the Bank of Latvia emphasizes that in terms of investments, we have been lagging far behind the two Baltic neighboring countries for ten years.

But the politicians still don’t have a plan for how to take our neighbors by the hand. The impressive European money is the only tool with which Latvia develops its economic interests, but there is a risk of not being able to complete dozens of projects worth more than 400 million already in the current fund planning period, reports the VARAM Ministry.

Economists, looking at the next year, generally do not see that significant steps have been taken to earn more.

Experts emphasize that the investment climate is important. There are no new companies that can pay high wages.

Evikas Silina’s government declaration promises to improve the competitiveness of the economy, reduce bureaucratic obstacles, increase tax revenues, and simplify tax payment.

There will be no changes in payroll taxes, which are important for employers to equalize labor costs with Estonia and Lithuania. According to the Minister of Finance, when the economy is at its lowest point, it is not right to change taxes.

Small business is also not expected to improve next year. The economic activity revenue account, which cost the Ministry of Finance 800,000, is used by only slightly more than 100 micro-enterprise taxpayers. Only one bank offers this service, it is not attractive to the others.

On the other hand, the opposition’s proposal to reduce the micro-enterprise tax for artisans and creative people next year, when the Saeima was reviewing the budget, did not receive support.

When it comes to economic development, one cannot ignore the ever-increasing size of the shadow economy. The state budget loses more than 2 billion euros annually.

Although politicians say they are looking for ways to encourage citizens to come out of the gray zone, the experts’ recommendations for a “Plan to Curb the Shadow Economy” for the next three years have not been included.

2023-12-17 17:37:00
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