«Latvia’s economic growth will be relatively rapid, but income inequality is a major problem that needs to be prevented,» concluded the European Commission in the latest report on economic development of member states.

There are multiple reasons for the drop in direct foreign investments in Latvia in recent years – foreign investors are scared off by the still existing problems like grey economy, corruption, risks of abuse of insolvency procedures and Latvia’s unpredictable tax environment. There are also flaws in construction regulations, says foreign investments expert Girts Greiskalns.

In relations with Russia, Baltics should arm themselves with strategic patience in the next several years, as stated in Latvia’s Foreign Policy Institute’s compilation on Latvia’s external and security policy.

The austerity policy realized in Baltics during the crisis has resulted in some of the lowest budget deficit and debt levels in the European Union. However, Baltics are part of the six EU member states, which includes Luxembourg, Denmark and Slovakia, that are able to fulfil all Maastricht criteria.

In spite of complications that appeared in the political environment in the world, global growth will become stronger in the next two years. It will be slowed by factors like unequal welfare growth and heavy debt burden, predicts SEB Bank macro-economic expert Dainis Gaspuitis.

The situation that is currently present in Latvia’s transit industry raises concerns about the industry’s future, says spokesperson for Latvian Transport Development and Education Association Igors Kabashkins.

«It is no secret that the volume of cargoes carried by rail in Latvia has already dropped by 20% this year. This can be explained with the unfortunate situation with prices of raw materials, coal demand decline in the west and Russia’s political decision to divert large volumes of cargoes to its own ports in the Baltic Sea. We have noticed recently that Russia’s threats tend to become real – state companies have been ordered to divert cargoes through its own ports, around Latvia. Such a decision is not only politically motivated, but also economically motivated – Russia hopes to recover its investments in St Petersburg, Ustyug and Primorsk,» – says Nordea Bank economist Gints Belevics.

The flow of foreign money shows that Latvia is an attractive country in the eyes of investors. They view the country convenient to work with and trustworthy. With that, decline in investments in not a good sign, Andris Ozols, head of Investment and Development Agency of Latvia, comments the rapid decline of foreign investments experienced in the first half-year of 2016.

Although Latvian Association of Ports CEO Karlis Leiskalns praises the work of Riga Freeport, where he works as well, advisor to Latvia’s Foreign Affairs Minister Sandra Sondore and president of Baltic Association – Transit and Logistics Inga Antane emphasize the importance of all three of Latvia’s biggest ports for the growth of Latvia’s national Economy.

Currently, the attention of all those who work and conduct business in a united Europe is being paid to the behaviour of British authorities after Brexit. If the country withdraws from the EU, many thousands of companies incorporated in Britain are very likely to leave their legal motherland. And a certain share of this business can be bid for by Latvia.