The Latvian economy has experienced a surprisingly good year with the crisis caused by the Covid-19 pandemic, Guntars Krols, partner of the audit company EY, Head of the Strategy and Business Consulting Department in the Baltic States, admitted in an interview with LETA.
“If we look at changes in gross domestic product (GDP) as one of the measures, then the picture is much more positive than everyone expected in March or April last year. It should be recalled that then it was predicted that everything would be as bad as in 2008 and 2009 “The economy will collapse, there will be huge unemployment and so on. None of this happened, except for the sectors that were closed due to the pandemic – hotels, catering and international travel,” said Crawley.
He pointed out that there are even interesting trends, as the money in the economy became more due to state aid, as well as money that would otherwise be spent on foreign travel entered the economy.
“Some sectors, such as building materials, furniture and hardware, were even significantly overheated,” said an EY partner.
“Therefore, apart from the few sectors I have already mentioned, there has been no such significant” collapse “in the Latvian economy. In addition, it must be remembered that the time of Covid-19 coincided with some other events that would affect the economy in one way or another. In the case of Latvia, it is not possible to precisely distinguish the effect of these events from the consequences of the pandemic, “admitted Krols.
He emphasized that as the impact of the pandemic diminished, growth would return to Latvia. “There will be growth, but we need to look at it a little more critically. For example, there is a lot of talk right now about rising inflation in both the US and Europe. Therefore, just a few percent a year ago will not mean the same as a couple of years ago. percent now, “said EY ‘s partner at the same time.
He also mentioned that growth is expected all over the world, therefore it is very important how Latvia’s competitiveness and attractiveness in attracting investments will change.
“It will differentiate countries how well they will progress as they move forward. We also need to look at how famous European Union funds are being used. Are they being used to close a hole in the past where no investment has been made before, or to position the country? “Is” rates “positioned so that growth is positive in the long run,” said Crawley?
It has already been reported that the EY Attractiveness Survey Europe was published last week, which is conducted annually, gathering quantitative data on investment projects, monitoring more than 10,000 news sources, and surveying 550 international investment decision-makers and 150 investors with a presence in the Baltics. . Last year, Latvia attracted 43 new foreign investment projects, which is 19 projects or 79% more than a year earlier. These new projects have created 2,583 new jobs, 69% more than a year earlier.
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