Analytics, Banks, Financial Services, Investments, Latvia

"In Latvia, this indicator is even lower than the Baltic average," Krumins noted. 

The Luminor representative indicated that investments in financial instruments make up 6.7% of households' total deposits in Latvia, 8.5% in the Baltic states and 49 percent in the EU. 

"There are several reasons for that. First of all, the Baltics have had much less time to engage in investing than the EU. Secondly, the Baltic households are less well-off than the EU, the Baltic states have had significantly less time to accumulate spare money. A third reason is a weak local capital market which lacks large and well-known companies that might attract investment," Krimins said. 

He said that the capitalization of Latvia's listed companies is 3% of GDP, whereas in Estonia the figure is 10 and in the EU 60% of GDP. In Denmark, for instance, the capitalization of listed companies even exceeds 100% of GDP. 

Krumins explained that investing activity is low also because people lack knowledge and understanding of financial markets, as well as distrust and absence of profit guarantees. 

"People are afraid to take wrong decisions and a result do just the opposite - invest when the markets at the highest point and sell when they are in decline," said Group Product Manager Arturs Cestnovskis.