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Artur Eresko → Substitution in a hotel room

Artur Eresko → Substitution in a hotel room

The Latvian tourism industry lives up to the principle ‘worse is better’. The situation with the crashed planes in Egypt (A321) and at the Turkish – Syrian border (Su-24) might redirect a part of Russian tourists to Latvia. It is cheap and peaceful here.


 

In case with Latvia it may be noted that before the foregoing events a Russian tourist was rather reluctant to abandon recreation in Riga, Jurmala and Sigulda. According to the forecasts of Rosturism the number of Russian tourists going abroad would reduce in 2016 by 40%. While according to data of the CSB for the first three quarters of this year, if compared to the same period of the previous one, the number of the Russians, who visited the Republic of Latvia, reduced by 33.3% (from 240.7 to 160.5 thousand people), but in the 3rd quarter – by 24.8% (from 91.3 to 68.7 thousand).

Thus, the Russians refuse recreation in Latvia less heartily than travels to other countries. And even now they remain the second in terms of quantity group of tourists arrived in Latvia (the first place in the 3rd quarter was held by the Germans, who came in quantity of 80.1 thousand people).

After the abovementioned incidents with the planes the outflow of Russian tourists from Latvia can be stopped and even stabilize at the level of the previous year – just in a month the tourism industry of RF lost two most popular directions. Perhaps, the Baltic Sea would manage to get a part of the holiday –makers, who lost access to the beaches of the Red and Marmara seas.

Of course, if to look for substitution in terms of the level of comfort of sea water, then it is better to do that in the countries of Southeast Asia or in the Caribbean. But, after all, the main reason of drop in the tourist traffic from Russia lies in economics rather than in politics. Devaluation of the rouble, inflation, job cuts have notably scaled down the consumption ambitions of the Russians. Therefore, the neighboring with Russia Baltic holiday resorts for poor and weathered holiday-makers would pretty suite to live out the period of tourism pessimism.

Another thing is more interesting. Despite the massive outflow of travellers from the East, the total number of tourists, who have visited Latvia, grew — by 3.4% (January – February 2015 vis-a-vis January – February 2014) and by 3.6% (3rd quarter of 2015 vis-a-vis 3rd quarter of 2014). On whose account?

The place vacated by the Russians in the 3rd quarter was taken by the Lithuanians (+30.9%) and Estonians (+30%). The results of the promotional campaign in the neighbouring countries, as well as shutting down of the local operating airlines have come into play – now the major road to the large world for the population of Lithuania and Estonia lies through Riga Airport.

The thing is that having won in quantity the Latvian tourism industry has lost in quality: according to data of the CSB, despite the rise in the number of travellers, in the 3rd quarter the hotel occupancy rate lowered (-0.5%).

 

Artur Eresko (Артур Ересько) - Candidate of Economic and Legal Sciences.

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    If for European policy the year 2017 promises to be complicated (elections, Brexit, unpredictable relationship with new government of the USA, trade wars with Russia), while in the economic aspect the new year promises to be quite not bad. At least, for the eurozone countries.


     

    The past year was distinguished by controversial signals concerning the economic growth in the eurozone, however, in general, as a result, positive news prevailed. The eurozone in 2016 demonstrated its soundness under the influence of internal and external shocks.

    Despite strong tension in the market in January and February of the past year, Brexit and continuing weakening of the global market, trust of business and of consumers in the eurozone remained amazingly stable. GDP, according to a tentative forecast, grew in 2016 by substantive 1.6%. So, the past year became the second year of a visible growth of the zone of Euro.

    Today we can presume that the moderate rates of recovery of the economy of the currency block shall preserve also in 2017 – GDP of the region shall grow yet by 1.5 %, at the least.

    The key risk factor for the European economics this year is the policy. Europe this year will again encounter a clear-cut political uncertainty, which might affect determination to invest.

    This is about elections scheduled in Europe to 2017: in the Netherlands, in France, in Germany and, probably, in Italy. After the populist surprises in Great Britain and in the USA a similar result in Germany cannot be ruled out.

    Anyway, in Germany the parliamentary elections ought to take place this year, which will result in the election of the chancellor of the country. France will elect its president, in the Netherlands — parliamentary elections. In Italy the situation is different: resigned at the end of the last year from the post of Prime Minister Matteo Renzi did not exclude in the middle of December that early parliamentary election might take place in June 2017.

    Nevertheless, so far we can forecast the growth of investments in the eurozone this year by 2.5%. This is, however, slightly less than 3%, achieved in 2015 and in 2016.

    While inflation in the eurozone is forecasted at the level of 1.5-1.8 per cent.

    The eurozone has lived for several years under the low inflation condition, even the risk of deflation was emerging, which threatened the process of recovery of economics of the region. This year would considerably weaken or even remove the low inflation risk.

    Here it is important to mention that in December last year inflation in the eurozone already jumped by half a percentage point – to 1.1%, which practically was completely caused by oil price hikes. There are not yet any signals of a new fall in price of a barrel, and there is no reason to be worried of a stop of rise in consumer prices in the eurozone countries.

     

    Artur Eresko (Артур Ересько), candidate of Economic and Legal Sciences.

  • Artur Eresko → Foreign trade: the deficit shrank to the minimum

    The jerk of woodworking industry in September failed to compensate hard landing of export of oil and grain crops. In general, export of Latvian goods in September as compared to the same month of the previous year declined by 2.7%. Over nine months of this year the fall in export of goods made up 1.6% as compared to nine months of 2015.


     

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    Last year, in comparison with 2015, the volumes of construction products in comparable prices for calendar-aligned data decreased by 17.8%. In absolute terms, the fall was 318 million EUR.

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