The start of the year was full of exciting and stimulating economy-related news. Last year the war close/far away, economic sanctions imposed on one of the sides and the consequences from all that made life for may difficult, but Latvia managed to get through it better than expected.
Latvia’s GDP has even managed to stabilise and improve, according to economists. Even private deposits in various banks have even reached a new record-high peak. The shopping fever last Christman brought much joy to residents and made the retail sector and the State Treasury richer.
Now the geopolitical crisis, on the other hand, revealed the pettiness, determination and other strengths of Latvia’s nation. This period of challenges helped people reorganise much in the national economy and overall business views. Many hope there are now fewer ‘dubious projects’ left in the business environment and state procurement projects. Residents have even managed to create safety pillows despite this difficult time.
Kazakhstan, though very far away from Latvia, has provided a great deal of support to the country’s GDP growth by sending its freight to Latvia’s sea ports. This regional superpower recognises its position and the globally important potential of its economy. It remains an important partner for Latvia, the EU and the western world in general.
The European Parliament and European Commission, meanwhile, are making plans to ban the use of wood chips in central heating. Though worrying for some member states, it is a very telling example of the diversity the EU has when it comes to green policy-making. It seems the opinion of many members states rich with forest and natural resources (Nordic countries and Baltic States) that these resources should be used seems less relevant than the opinion of other countries – that these resources should be guarded instead.
BNN gives you a summery of the most relevant events of the past week in the following topics: Kremlin’s clown; Growth in a storm; Safe partner; Banks filling up; Bad deal; Anniversary coming up; Apolitical?; Protecting the biomass.
KREMLIN’S CLOWN
State Security Service to look into Grevcova’s statements about «civil war» in Ukraine
Photo: AP/SCANPIX/LETALatvia’s State Security Service (VDD) intends to look into Saeima deputy Glorija Grevcova’s public statements in regards to the Russian-Ukrainian war.
In one of her recent TikTok videos, Grevcova said: what is happening in Ukraine now is a civil war, «a civil war in accordance with all canons. Ukrainian people fighting the Ukrainian army».
«This is what I know. So there’s no reason to speculate and tell me about Russia attacking anyone,» said the deputy.
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GROWTH IN A STORM
Experts less than enthusiastic about Latvia’s GDP growth in 2022
Photo: Evija Trifanova/LETALatvia’s Central Statistical Bureau (CSP) reported on Monday, the 30th of January, that the country’s gross domestic product (GDP) increased by 1.8% in 2022. However, the news also caused respected economic experts to become cautious and even pessimistic about the economy’s future.
The Ministry of Finances (FM) explains that it was the warm winter and state support provided to help cover growing energy prices that helped Latvia avoid a full recession in Q4 2022.
According to this institution, the generally low improvement of consumers and businesses mood is confirmed by ESI confidence index data. This, according to the ministry, comes from news about the drop of energy resource prices on the global market and passing of peak inflation in autumn 2022.
At the same time, the service industry remains affected by the drop in wholesale trade volumes experienced in spring.
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SAFE PARTNER
Kazakh businessmen see great potential in cooperation with Latvia’s large sea ports
Photo: Edijs Pālens/LETALatvian Stevedoring Company Association (LSA) met with businessmen from Kazakhstan on the 1st and the 2nd of February. Foreign businessmen were on a visit to Liepaja Special Economic Zone and Riga sea port. During this visit, sides discussed the topic of Latvian-Kazakh cooperation to further reinforce the transport corridor between the two countries. They also discussed new Eurasian transport road perspectives and alternative corridors.
Ambassador of Kazakhstan in Latvia Timur Primbetov and deputy state secretary to Latvia’s Ministry of Transport and head of the Latvian-Kazakh Transport work group Uldis Reimanis attended the talks and voiced support in favour of cooperation between the two countries.
Representatives of LSA, Ventspils and Lieapaja sea port-based businessmen and representatives of Latvijas auto discussed with the delegation of Kazakh KAZLOGISTICS company and US Agency for International Development USAID the challenges related to establishment of the Central Asian and European transport corridor and future challenges. They also discussed Latvia’s role and opportunities in the development of such a corridor.
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BANKS FILLING UP
Financial institutions’ profits up to EUR 326.3 million in 2022 despite various economic challenges
Photo: Fahad Al Rajaan/FlickrLatvian monetary financial institutions (MFI) – mainly banks – operated with profits of EUR 326.3 million in 2022, which is 26.5% more when compared with the year prior (EUR 257.9 million), according to information published by the Bank of Latvia.
In December financial institutions operated with profits of EUR 28.5 million.
The total asset value of these institutions reached EUR 26.026 billion on the 31st of December 2022. This is 6.9% or EUR 1.67 billion more when compared with the end of 2021, when assets were worth EUR 24.357 billion.
At the end of the year the balance of loans issued to residents by Latvian monetary financial institutions was EUR 13.394 billion, which is 7.8% more than a year prior. Loans worth EUR 13.315 billion were issued to residents last year, which is 8% more when compared with a year prior. The volume of loans issued in foreign currencies was EUR 79.2 million, which is 13.2% less.
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BAD DEAL
Management of Provision State Agency accused of illegalities with border infrastructure project
Photo: Paula Čurkste/LETAIn the criminal case regarding supplies of inappropriate barbed wire for the Latvian-Belarusian border, charges are presented to the management of the Latvian Provision State Agency (NVA).
The publicly accessible schedule of Riga City Court indicates that NVA director Ramona Innusa is the accused. She was appointed as the director of NVA in summer 2021 by then the Minister of the Interior Sandis Ģirģens.
Among the accused is also NVA Infrastructure Development Department’s director Oskars Dzirkalis. He was once the board chairman of the Courthouse Agency.
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ANNIVERSARY COMING UP
Reznikov: Russia plans a large-scale attack in February
Ukrainian Minister of Defense Oleksii Reznikov. Photo: AP/SCANPIX/LETAUkrainian Defence Minister Oleksii Reznikov stated that Russia is planning a large-scale attack, which could begin as early as on the 24th of February, BBC writes.
Reznikov said Moscow had mobilized thousands of troops and could try to do something big to mark the anniversary of the invasion. On the 23rd of February, Russia also celebrates Army Day. The Minister of Defense informed that Russia has mobilized about half a million soldiers for the invasion. In the fall, Russian President Vladimir Putin announced the mobilization of 300 000 new conscripts, but Reznikov indicated that the actual number of conscripts could be much higher.
Meanwhile, three people were killed and eight others injured in an attack on Kramatorsk after a Russian-launched missile hit a residential building. Rescuers continue to search the ruins.
Ukrainian President Volodymyr Zelensky stated: «The only way to stop Russian terrorism is to defeat it. By tanks. Fighter jets. Long-range missiles.»
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APOLITICAL(?)
Estonia will participate in the Olympics; Latvia considers boycotting them
Photo: UnsplashThe Estonian Olympic Committee (EOK) believes that boycotting the Olympic Games should be left as the last option, and cancellation of participation would be unfair to athletes, writes ERR News.
EOK President Urmas Sõõrumaa said that Estonia would not withdraw its participation. Announcements about the boycott of the Olympic Games are a reaction not only to the war in Ukraine but also to the fact that many Russian athletes are part of the Russian army.
Sõõrumaa said on the Estonian television program Esimene stuudio: «Boycotts have never really led to anything […].»
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PROTECTING THE BIOMASS
European Parliament’s proposed ban on use of wood chips for heating causes uproar
Photo: Evija Trifanova/LETAThe newly-formed Ministry of Climate and Energy, as reported by Raimonds Čudars’ strategic communication advisor, reminds that Latvia is among EU member states that categorically object to the European Parliament’s proposed amendments in relation to «primary biomass».
«Primary biomass» or «lumber taken from forests» in this case is wood chips – a by-product from lumber processing. It can serve as a fuel in specialised furnaces or biomass energy plants. Wood chips can also be used in production of particle board or particle board blocks, as well as agriculture, gardening and elsewhere.
European Parliament’s proposal is amending the Renewable Energy Resources Directive. Although at their core amendments do not mean a full ban on use of biomass as fuel, they do provide for excluding primary forest biomass from all state support plans, renewable energy goal and longevity criteria.
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BNN SUMMARY OF THE WEEK: Crisis empowers. Barbed wire scam. Sports «as usual»
