Business forecasts have never been as rosy as now

The participants were looking for answers to the questions: What are the prospects of the Latvian national economy? Which sectors have a future? Which markets and foreign partners are and will be important for us? What needs to be done to ensure economic development and improve the living conditions of Latvia's people?

When opening the conference, Jānis Maršāns, Chairman of the Board of Dienas Bizness, highlighted the unpleasant situation where businesses have occurred in the context of tax reform. According to him, the tax reform initially discussed with and agreed by coalition partners, including business representatives, is an entirely different "product" compared to the one approved by the government. "I think it [the approved tax reform] is one of the major government coalition "dupes" of businesses over the last 10 years. The reform has earned quite vivid epithets from entrepreneurs", said J. Maršāns.

Elmārs Prikšāns, Head of OP Corporate Bank plc Branch in Latvia, emphasised at the conference: "Looking back at the last five years, the future has never seemed as rosy as now. Macroeconomic forecasts show that this year the economy is going to grow by at least 4%, and a similar pace is likely to also persist in the next year. We are growing, and growing fast, but this growth, however, also poses certain challenges. It's becoming increasingly difficult for entrepreneurs to find employees, wages are rising sharply, and with that also inflation. To sustain growth, we need strong companies able to compete not only regionally, but also globally and contribute to the Latvian economy. Therefore, it is essential to promote innovation, ensure the supply of an educated workforce, adequate infrastructure and actively encourage companies to invest so that they may also stay competitive in the future.

Arvils Ašeradens, Minister of Economics, also said that the Latvian economy is developing very well and is balanced, whereas entrepreneurs must work to raise productivity. "The Latvian economy is developing very well, but the big story of the Latvian economy is about productivity: there are very many sectors in Latvia where productivity is low", noted A. Ašeradens. The Minister also underlined that the area which now must be looked at with great caution is the labour market. "We are not currently facing a threat of a major economic burst followed by recession, since the macro-economy is balanced. The situation with the labour force is different. The only thing to be looked at with caution is the labour market", said the Minister.

Inese Kamarūte, Chairperson of the Board of Executive Search and Human Resource Management consulting company Fontes noted that entrepreneurs need to think about how to attract and interest high-level specialists who have worked at large corporations in Russia and the USA. Such high-level specialists currently wish to return to Latvia, but they are not always able to adapt to our business environment both from the point of view of remuneration and job descriptions. "Today's reality is that a person who has worked for a major corporation in the USA or Russia can replace 2–3 people working at a Latvian company. This is dangerous, however, entrepreneurs benefit both financially and in terms of skills", said I. Kamarūte. The expert also noted that today company owners often wish to see the impossible in a management position – a human cyborg.

The management of infrastructure flagships Riga International Airport VAS, Latvijas Gāze AS, Latvenergo AS and Latvijas Dzelzceļš VAS provided information about their companies' plans. These include an ambitious expansion of the public area of the airport's passenger terminal in 2019 by integrating the planned Rail Baltica railway line. Today the expansion project costs are estimated at EUR 60 m and would allow for a capacity increase of passengers served from 8 to 14 million per year.

Āris Žīgurs, Chairman of the Board of Latvenergo AS, told the conference that by increasing the effectiveness of the group's operations, including through the automation of various processes, by monitoring the power network as a single entity and optimising the geographical locations of technical resources, the number of people employed by the group would be reduced considerably – to 3,000 from the existing 4,000.

Within the Business Forecast 2018 Conference, Health Minister Anda Čakša, Minister of Economics Arvils Ašeradens, Transport Minister Uldis Augulis, Head of OP Corporate Bank Plc Latvia Branch Elmārs Prikšāns, Technology Department Director of the Latvian Investment and Development Agency Edgars Babris, lawyer at Squalio Marina Kurgalova, Chairperson of the Board of DatuAizsardziba.lv Agnese Boboviča, Chairperson of the Board of Riga International Airport Ilona Līce, Vice-President of Latvijas Dzelzceļš AS Aivars Strakšas, CEO of Latvenergo AS Āris Žīgurs, CEO of Latvijas Gāze AS Aigars Kalvītis, Chairperson of the Board of Fontes Inese Kamarūte, Deputy CEO of Pillar RE Services Guntars Cauna and other experts also participated in panel discussions.

This year, the Business Forecast conference organised by Dienas Bizness brought together 180 stakeholders.

More information about opinions voiced during the conference and companies' plans is available on the db.lv business information portal, and also in the coming issues of the Dienas Bizness newspaper.