Lithua­nian and Es­to­nian busi­ness­men are ahead of Latvia in terms of in­vest­ments

Baltic News Network - - News -

In Latvia, 36% of small and medium-sized com­pa­nies have plans to in­vest in the de­vel­op­ment of their busi­ness this year. In Es­to­nia and Lithua­nia, on the other hand, the pro­por­tion of busi­nesses with de­vel­op­ment plans is 42% and 46%, re­spec­tively, ac­cord­ing to re­sults of a re­cent study per­formed by SEB Bank.

22% of re­spon­dents in Latvia men­tioned hav­ing plans to in­vest up to EUR 30,000 in the de­vel­op­ment of their busi­ness this year. 14% men­tioned hav­ing in­vest­ment plans larger than EUR 30,000. 14% of small and medium-sized com­pa­nies in­ter­viewed in Es­to­nia have plans to in­vest more than EUR 30,000 in the de­vel­op­ment of their busi­ness. In Lithua­nia, such am­bi­tions were voiced by 20% of in­ter­viewed com­pa­nies.

SEB Bank board mem­ber Ar­nis Ška­pars: «Eco­nomic growth has taken a rapid speed. At the same time, the labour mar­ket is be­com­ing nar­row, whereas the wage level con­tin­ues grow­ing. Th­ese con­di­tions cre­ate pres­sure for com­pa­nies to raise their ef­fi­ciency.

Nevertheless, they re­quire in­vest­ments. It is clear that Es­to­nian and Lithua­nian busi­nesses’ am­bi­tions are higher than their coun­ter­parts in Latvia. It should be said that in­vest­ment ef­fi­ciency is closely as­so­ci­ated with com­pe­ti­tion. Be­cause of that, we risk fall­ing be­hind neigh­bour­ing coun­tries. In ad­di­tion – eco­nomic growth is the right time for in­vest­ments, be­cause it is much harder to do dur­ing pe­riod of eco­nomic de­cline.»

He says that the gen­eral mood of small and medium sized com­pa­nies in Latvia is against the ben­e­fi­cial eco­nomic cli­mate. It is pos­si­ble that the rea­son for that can be ex­plained with the fo­cus of 83% of those com­pa­nies on the do­mes­tic mar­ket, where com­pe­ti­tion is rel­a­tively lim­ited.

«A great deal of fo­cus on the lo­cal mar­ket im­proves our busi­ness­men’s low­ered look on their growth per­spec­tives – even if pur­chas­ing power in Latvia in­creases, there is no rea­son for op­ti­mism, be­cause pop­u­la­tion con­tin­ues to de­cline. The pro­por­tion of small and medium-sized busi­nesses ori­ented on the lo­cal mar­ket in neigh­bour­ing coun­tries is smaller – 75% in Es­to­nia and 66% in Lithua­nia. Work­ing with our clients ev­ery day, we have ob­served that ex­port­ing com­pa­nies are more pos­i­tive and more sen­si­tive to­wards the need to in­vest in their de­vel­op­ment,» Ška­pars con­cluded.

Newspapers in English

Newspapers from Latvia

© PressReader. All rights reserved.