Latvia's productivity seriously lags behind EU average, says minister

Take note – story published 6 years ago

Latvia’s economic productivity is significantly lagging behind the EU average – it is estimated at about 43% of the average productivity level in the EU in real prices, said Economics Minister and new Unity leader Arvils Aseradens in an interview with Neatkariga daily on September 20.

He said that there are just a few competitive sectors in Latvia, such as timber processing, where productivity is over 70% of average in the EU. "This sector is able to develop and compete in global markets, ensure exports worth several billions of euros. Grain production is very export-capable, productive in the farming sector," the minister said.

Meanwhile, chemical industry which has received quite much investments recently reports 23% productivity, machinery – 25%, power and gas supply – 25%, extraction – 26%.

Aseradens noted that the most tragic sector is ICT, software developing where productivity is below 30%. The minister said that wages in this sector are growing steeply, but income and exports are very low. "This sector is at the very bottom in the EU along with Bulgaria and Romania. ICT and software development is necessary also for other sectors – farming, manufacturing, the public sector. Unfortunately ICT sector is very weak," Aseradens said.

He underscored that Latvian companies should invest in their development, development of technologies, human resources.

In order to increase competitiveness, the government has done two things – introduced zero rate on reinvested profit so that companies can invest in equipment, technologies, people, and raised the minimum wage so that companies become more efficient and productive, pay wages to people and people would not leave the country.

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Related articles


Most important