OREANDA-NEWS. April 09, 2010. Already for several subsequent months the population in their sentiments about the prospective economic situation in the country in a year, in spite of the events of the last two years and the impact of downturn on as good as every family display considerably more optimism, and in turn more that one half of all respondents believe than in five years-time the situation in Latvia will be definitely improved. Such data has been acquired by the latest "DnB NORD Latvian barometer" and presented at the press conference on Wednesday, 24th of March.

The regular monthly questions revealed that people are not satisfied about the existing situation in the country. When asked about the opinion on the current situation of Latvian economy the majority or 54% of all respondents described it as very bad, whereas as rather bad it was considered by 35%. By mere two per cent points up to 10% has increased the number of respondents who are of opinion that the overall situation is moderate, whereas 1% percept it as good or rather good. 

"DnB NORD Latvian barometer" has found out that over the last three month considerably or by 13 per cent points – up to 40% - has grown the number of people who believe that the economic situation in Latvia currently remains unchanged: it is mostly on account of pessimists, as since December from 69% to 50% has dropped the number of respondents who consider the situation deteriorating. Similar improvements are observable also regarding the question about the expected economic situation in one year, as since November the number of optimists who believe in improvement of the existing situation has grown from 12% to 21%.

The respondents of "DnB NORD Latvian barometer" have displayed higher degree of optimism also with regard to the question concerning assessment of the material standings of the family. 44% (previously just 37%) of all respondents answered that currently they would describe their material situation as mediocre, whereas it is considered rather bad or very bad by 48% of all Latvians, which is by nine per cent points less as compared to the precedent study.   

"Unemployment rate, the budget deficit, and the external debt are growing, yet it looks like the people are so tired of all those bad news that they are not being absorbed any more. Now people are eager to hear every bit and piece of positively "shaded" news to gradually build their new visioning thereon. The people have started to regain the confidence and belief that they are in top of things. And that is good, as, if we assume that the thesis about the sense as primary and substance as secondary aspect is correct, it implies that any positive changes first should register in the people's minds and only afterwards we are to experience positive changes in the material world. And the data gathered by "DnB NORD Latvian barometer" shows that the positive changes in the people's minds are in progress," says the director of SKDS Arnis Kaktiтр.

The issue still associated with growing pessimism according to "DnB NORD Latvian barometer" is the question about the chance to find a good job, as 66% of all respondents were of opinion that it is impossible, and 23% of others supported their point of view by answering that it is rather impossible. Just 5% considered the likelihood of positive outcome as moderate, whereas the number of optimists who still believe that even in the existing situation it is possible to find a good job, amounted to mere 1%.

This time the second part of "DnB NORD Latvian barometer" was composed to find out the opinion of respondents on their future life in five years. When thinking about changes in their personal income people have been rather optimistic, as so many as 39% answered that it will augment. In turn, 24% reckon that their monthly income will remain the same, whereas 7% - that it will slightly drop. Just 6% expressed the opinion that their income will materially decrease, and equal number of respondents revealed that they will not be affected by the situation, as in five years they won't live in Latvia any more.

When delving into principal reasons why people believe in growing of their income in five years, the majority or 70% opted for the answer that the determinant will be improvement of the economic situation in Latvia. Just 22% answered that there is a chance that someone from the family will have better earnings, and similar share of respondents admitted that the growth of income should result from making their way up.  

"By and large, Latvian people are optimistic, yet to some extent fatalists and remarkably conservative. They mostly regard themselves as the victims of the existing circumstances and pin too much hope on external forces - the government, overall economic situation. People underestimate their own role in welfare-providing," says the DnB NORD Banka expert in economics Pзteris Strautiтр.

"DnB NORD Latvian barometer" also has identified that the three major factors that should facilitate economic growth over the next five years according to the population are increase in numbers and activities of the corporate sector, structural reforms in the state administration as well as support to priority industries in the nationwide economy. The three most popular industries that should be developed in order to secure exports as nominated by the respondents are timber and timber production, foodstuff and transportation services (transit).  

"Three out of four major sources of the export income are on top of the list drawn by the respondents, i.e. timber, foodstuff, and transit. Yet the second actually biggest source of the export income and the most considerable goods export item, i.e. metal-processing and machine building products holds just the seventh place with 11% of votes. Due to some obscure reasons people refuse to recognize this industry "organic" in the context of Latvian economy. However, such obviously traditional and country-associated industries like timber or foodstuff are named by considerably more respondents - 55% and 48%, respectively. Apparently to metal-processing and machine building are still associated with the notion about the hypertrophied Soviet hard industry that was forced on Latvia "from above". Responses demonstrate that the future in the eyes of population is greatly related to utilization of local raw materials," says P.Strautiтр.

People also were asked which countries Latvia might bear resemblance to in five years in terms of development. Most often or in 39% of all cases the respondents answered that to Estonia and Lithuania, whereas 14% mentioned some African countries (like Zimbabwe), and 6% believed that to Scandinavian countries.