tag:blogger.com,1999:blog-2873748063007712173.post5584721284779229606..comments2010-02-14T12:44:58.216+01:00Comments on Latvia Economy Watch: Danskebank's EMEA Daily Latvian Quote Of The DayUnknownnoreply@blogger.comBlogger6125tag:blogger.com,1999:blog-2873748063007712173.post-55231038105210114812009-07-22T20:58:41.793+02:002009-07-22T20:58:41.793+02:00Yes, very interesting, another warning I have for ...Yes, very interesting, another warning I have for you. I work for the project Olympic Games in Sochi. Now there are these "aliens" inhabitant of Latvia or Estonia with passports on the building sites in Sochi. So in other words, there is manpower from the Baltic States ready are to worke for 1,000 to 1,300 roubles on the day. This was not some months ago. Very good for the project but tells a lot about the balticsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2873748063007712173.post-3547822860513848842009-07-22T14:54:22.217+02:002009-07-22T14:54:22.217+02:00Robert,
I think your argument is pretty sound, an...Robert,<br /><br />I think your argument is pretty sound, and actually quite important.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-2873748063007712173.post-34189846056749292142009-07-22T14:47:45.183+02:002009-07-22T14:47:45.183+02:00As far as I know the prevailing assumption is that...As far as I know the prevailing assumption is that usually repatriates earn more than they need for bills and living expenses of their family members back at home.<br /><br />Interesting question is how did and if their behaviour change. They can either save that money in Latvian or leave it in their British/Irish bank (which any employee has to have). Knowing an overall sentiment about Latvian economy and convenience of not transferring money, I would think they do the latter. <br /><br />Another interesting aspect I observed is that if before some family members migrated and some stayed in Latvia, then now the whole families are emigrating to countries like Britain. Especially if one is earning their income in GBP maintaining the family in Latvia is becoming quite an expensive exercise.<br /><br />I may be wrong, but I have a suspicion that the cost of maintaining the currency peg at current level could cost more than Latvian government imagines. For me it is another step towards the stagnation of economy - if Latvian families are minimising spend and investments in Latvia. Not to mention devastating demographic effect.Robertnoreply@blogger.comtag:blogger.com,1999:blog-2873748063007712173.post-23711962117877126412009-07-22T12:57:44.638+02:002009-07-22T12:57:44.638+02:00Hi Robert,
"I was wondering if the current L...Hi Robert,<br /><br />"I was wondering if the current Latvian Bank's stubbornness to maintain the currency peg actually has a considerable hindering effect on the repatriate expenditure. That could be especially true for Latvians earning their salary in GBP."<br /><br />Well, it's an interesting question. I hadn't thought about this. In the end the family is just like any other corporate entity, there is an income account and a capital account. When resources are needed under the income account then transfers will be made, whatever the rate/price. But if they are for the capital account (saving, asset accumulation), then they will be stored till after devaluation (or deposited in euros in the Latvian bank). So at the end of the day the issue is the same: Lat liquidity.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-2873748063007712173.post-71771301179570344472009-07-22T11:56:39.611+02:002009-07-22T11:56:39.611+02:00I thought to get your views on something else.
I...I thought to get your views on something else. <br /><br />I think it is not a secret that lots of Latvians have emigrated from Latvia in search of jobs. In pre-crisis time I remember reading a number of articles that there is a considerable economic impact of this. Latvians earn considerably more abroad than in Latvia and actually spend their income back at home. <br /><br />I was wondering if the current Latvian Bank's stubbornness to maintain the currency peg actually has a considerable hindering effect on the repatriate expenditure. That could be especially true for Latvians earning their salary in GBP.Robertnoreply@blogger.comtag:blogger.com,1999:blog-2873748063007712173.post-68670753009501796062009-07-22T00:25:23.917+02:002009-07-22T00:25:23.917+02:00To provide with logic behind quote of the economic...To provide with logic behind quote of the economics minister, I believe he thought that the EC and IMF does not realize the scope and importance of grey economy in the country. With that figure hard to estimate (ranging from 15%-40%). Any increase of Tax base will only push the economy on the gray side both for individuals (tax exemption on income earned) and for companies (unaccounted cash revenue, forgone taxes,etc). Thus resulting in even less tax revenue that initially had and larger budget deficit to balance. <br />As for VAT tax, as a sign of protest, some of the local companies have publically annouced the full closure of their business if the VAT is raised to 23%.Zinatajsnoreply@blogger.com