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International Internet Magazine. Baltic States news & analytics Tuesday, 17.07.2018, 14:47

Analysts: productivity has become one of major challenges in Latvian economy

BC, Riga, 21.09.2017.Print version
Increase of productivity has become one of the major challenges in Latvia’s economy, said banking analysts surveyed by LETA.

SEB Banka macroeconomic expert Dainis Gaspuitis told LETA increase of productivity is among the most important challenges in national economy. "Welfare of every employee, every company, the whole society will depend on how successfully we are able to raise productivity," he said.


Gaspuitis said, that, according to the Organization for Economics Cooperation and Development (OECD), the wish and ability of businessmen to join the global added value chains play a significant role in productivity. "At present the EU funds play a large role, businesses have purchased new technologies. Nevertheless, also a tax system should promote investments in technologies and skills. Latvia’s investments in research are very low," said Gaspuitis.


He also noted that the focus of Latvian companies on external markets and innovations is lower than in Lithuania and Estonia on average.


DNB Banka macroeconomic expert Peteris Strautins told LETA that the public sector has to change rapidly. There are sectors that already are on a good level (professional education), there are some that are undergoing changes (general secondary education), and some that are in a deep stagnation (higher education).


Meanwhile, the private sector should not wait for everything to get arranged by itself.


He noted that OECD recommendations are also related with the role of Riga as the capital in Latvia’s economy, assessment of this role and wise use of it. In this respect, the goal included in the National Development Plan to lower the share of residents living in Riga and the region is a catastrophic stupidity.


Swedbank chief economist Martins Kazaks also told LETA that the most important issue in OECD survey is the role of Riga in development of regions.


He also said that in order to increase productivity there is nothing new that should be done – improvements in the health sector would allow people work, education would ensure the necessary skills, efficient court system would ensure shorter trial time, better protection of investors and smaller shadow economy.


As reported, the OECD on September 15 released its first Economic Survey of Latvia since the country’s accession to the organization. Latvia joined the OECD in 2016.

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