Investments and Their Role in Economy
Foreign Direct Investment in Latvia(FDI)
After Latvia’s accession to the EU, the inflow of FDI increased rapidly and in 2017 reached its highest point (EUR 14.37 billion). The main factors fostering FDI inflow were new market opportunities for foreign investors, stable monetary policy(15), Latvia’s advantageous geographic location between the EU and CIS countries, and its well-developed infrastructure. After being severely affected by the global financial crisis, Latvia implemented extensive austerity measures(16). As a result, Latvia’s economy, the confidence of foreign investors, and FDI inflows are on the rise again.
Historically, most of Latvia’s FDI inflow has come from neighboring countries in the Baltic Sea region and other EU member states. The largest amounts of investment in 2017 were from Sweden – 19 % of the total FDI stock at Latvia’s economy. In 2017, FDI from the EU states represented 78% of all FDI, including 51% represented by investment from euro-area countries.
There are many types of investments with there own general set of features, risk factors and ways in which they can be used by investors. They play an important role in economy and investment from abroad can lead to higher wages and improved working conditions.
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