“Latvia’s economic growth is projected to be within the range of 4-5% in 2021, but uncertainty about the impact of the spread of the Covid-19 virus is still high. To mitigate the effects of the Covid-19 crisis, entrepreneurs will also have a number of aid programmes available next year, as well as we have submitted a number of proposals for reforms under the European Recovery Plan, contributing to transformation of the economy, productivity and digitalisation, the availability of housing, including rental and social housing, and energy efficiency,” emphasises the Minister of Economics Jānis Vitenbergs.
“As the Minister of Economics, I am pleased with the agreements already reached in the government on the state budget for 2021. Budget priorities of the Ministry of Economics for 2021 are reducing total costs of the mandatory procurement of electricity, support to protected users and energy-intensive companies, after a many-years break state co-funding for ensuring the residential premises vacation benefit for tenants of denationalised houses has been found, funding for continuation of the housing guarantee support programmes, promotion of investments and exports, as well as creation of new jobs has been granted,” emphasises the Minister of Economics.
In order to reduce the total costs of mandatory procurement (MP) of electricity and to support protected users and energy-intensive businesses, 31,576,857 euros are planned to be channelled into the government budget of 2021. The reduction of the total amount of mandatory procurement will make it possible to reduce MPC payments of the population and businesses next year by an average of 23% compared to the current fixed MPC rate. The reduction of the mandatory procurement component of electricity is essential both in terms of consumer solvency and energy poverty reduction and in terms of improving international competitiveness of companies, including exports.
In 2021, 5 million euro have been allocated to the continuation of the housing guarantee programme implemented by Altum. The housing guarantee programme plays a role in boosting family safety and planning family growth, the programme promotes the development of the real estate market by increasing the number of real estate sales transactions and construction of residential buildings, and the programme has a significant impact on the mortgage market.
In 2021, the national budget earmarked 2,784,151 euro for state co-financing for the provision of the residential premises vacation benefit for tenants of denationalised houses. As is known, it is necessary to ensure the fulfilment of the state duty regarding the financing of the residential premises vacation benefit in accordance with the Law On Assistance In Solving Apartment Matters and the Law On Residential Tenancy. In 2020, information has been submitted to the Ministry of Economics regarding 9 persons registered in Jurmala and 225 persons registered in Riga for the receipt of the vacation benefit for the total amount of 2,784,150.50 euro.
In 2021, additional 1,274,880 euro are planned to be channelled to boost direct investment by creating an excellent business environment and creating new high-paying jobs. In order to improve business activities and the environment, it is planned to establish an analytical tool to assess the effectiveness of state aid programmes. In turn, in order to mitigate the consequences of the Covid-19 crisis it is planned to work proactively on existing and potential investment projects. This funding will also be used to carry out an evaluation of foreign direct investment by establishing a single contact point for the evaluation of international investment projects.
In order to strengthen the export capacity of Latvian entrepreneurs by introducing the country’s economic image, it is planned to channel 1,367,761 euro in 2021. The Government’s Action Plan instructs the Latvian Investment and Development Agency (IDAL) to achieve a unified and positive image of Latvia as a place for exporting companies. A uniform national image is particularly important for Latvian companies on the international market, where the product’s clear country of origin and positive associations might add value products of the company. A unified image is an essential instrument for Latvian representatives in embassies and representation offices.
In 2021, additional 853,467 euro are expected to be allocated for strengthening the capacity of the Competition Council by introducing effective supervision in the field of competitive neutrality and implementing supervision of commercial activities of public persons. Timely and effective prevention of infringements of competition law has a direct and preventive effect on the efficient use of money by public persons, including through the absorption of EU funds, and on the saving of every business and consumer’s money, avoiding overpayment due to distortions of competition and generally promoting long-term economic growth.
In 2021, additional 853,532 euro are expected to be allocated to strengthen the capacity of the Consumer Rights Protection Centre to ensure the supervision of construction products, the conformity of ship equipment and the cross-border infringement procedure. The funding will ensure effective supervision of consumer rights and the market and the development of new areas of supervision (in particular construction products, drones, prevention of cross-border infringements and supervision of platforms).
In 2021, additional 444,959 are expected to be channelled to the modernisation of statistics, the reduction of administrative burden on economic operators and the promotion of data availability. The funding is expected to modernise the provision of statistical data by promoting the acquisition of new data and the efficiency of the analysis process for data users by reducing the administrative burden on economic operators.
In 2021, 1,027,500 euro are planned for the participation of Latvia in the International Expo 2020 Dubai. Due to the outbreak of the COVID-19 earlier this year, the opening of the exhibition was rescheduled for a year and it will take place between 1 October 2021 and 31 March 2022. Participation in the exhibition of the Republic of Latvia would ensure closer diplomatic and economic links in the region, particularly with the United Arab Emirates. It should also be noted that ambassadors from all EU Member States have confirmed that Member States will continue to participate in the exhibition. In the current situation, it is necessary to make changes to the planned budget of the project by reallocating funds from 2020 to 2021 and 2022. Latvia’s participation in the exhibition is organised by IDAL.