Latvia's most productive industries not threatened by future risks

  • 2017-10-18
  • LETA/TBT Staff

RIGA - Latvia’s most productive industries – wood processing, agriculture, manufacture of nonmetallic minerals and transport – are not threatened by future risks, Economics Minister Arvils Aseradens (Unity) said at a meeting of the Saeima Sustainable Development Committee today.

While telling lawmakers about the sustainability of the Latvian economy, the minister indicated that productivity is one of the most pressing economic growth issues. Furthermore, labor costs are currently growing faster than businesses’ productivity.

“Latvian enterprises’ overall productivity level is 44 percent of the EU average, which means that many industries in the EU are more productive than in Latvia,” Aseradens said.

In the minister’s words, wood processing is Latvia’s most competitive industry as its productivity level is 73 percent of the EU average. Agriculture and forestry follow with 69 percent, manufacture of nonmetallic minerals with 63 percent and transport with 58 percent. The transport industry’s comparatively good result was achieved largely thanks to the successful performance of airBaltics carrier, Aseradens said.

“These are globally competitive industries and they will not create risks in the future. Other industries, however, can expect difficulties in the future, so they have to think hard about increasing their competitiveness and productivity,” the economics minister said.

Aseradens named the ICT was one of the problematic industries as its productivity only reaches 32 percent of the EU average. “The ICT industry should be one of the main drivers of economic growth, but its productivity figures suggest that something in Latvia is being done differently,” the minister said.

Aseradens said, however, that on the whole, the situation in the ICT industry is not bad but that there are too few such companies in Latvia.

Janis Salmins, an expert from the Economics Ministry, noted that Latvian ICT companies should focus on their employees’ efficiency, as Estonian ICT businesses generate EUR 26,000 in annual per capita revenue in contrast to EUR 12,000 generated by Latvian ICT companies.