Latvian economy lacks investment of around €2-3 billion - Valainis

RIGA - The Latvian economy lacks investments of around EUR 2-3 billion, Economics Minister Viktors Valainis (Greens/Farmers) told Latvian Television this morning.

He noted that the latest economic report on Latvia presented this week by the Organization for Economic Cooperation and Development (OECD) largely coincides with what is already being implemented in Latvia. "The recommendations coming from the OECD are also on our agenda," the Minister said.

Valainis also mentioned that Latvia's economy lacks investments of EUR 2-3 billion, thus the capital market needs to be developed first and foremost. "The amount of investment that our economy lacks is not five, ten or 100 million euros, it is 2-3 billion euros," he said, adding that such an inflow of financial resources can only be achieved by seriously reviewing the way in which the Latvian economy is financed, and the development of the capital market is one of the preconditions.

The Minister also noted that the OECD report had stated that the tax burden on the lowest wage earners in Latvia was too high, and said that the Government was determined to find a solution to reduce the labor tax burden on low wage earners in Latvia, i.e. that Latvia was currently working on models for reducing labor taxes.

"People are not able to pay this tax burden, which leads to the shadow economy," Valainis said, adding that Latvia is not competitive with the Baltic countries in the area of labor taxes, especially in the wage bracket below EUR 2,000.