OREANDA-NEWS. March 10, 2011. The mood of large and medium enterprises in Latvia is back in the level of 2007 and is evaluated as cautiously optimistic, shows Citadele Index research conducted by Citadele Bank in cooperation with market and public opinion research centre SKDS, reported the press-centre of Citadele Bank.

“In September last year, the spirits and prognoses for the future of entrepreneurs were much more optimistic and the level of optimism at that time reached the highest result since the beginning of 2008. Research shows that after the Parliament elections and taxation changes that were introduced entrepreneurs’ state of mind is much more cautious than in September,” says Agnese Paege, Citadele Bank’s Head of Corporate Services Directorate.

Research results indicate that the ones who see the present economic situation and future perspectives optimistically are large and medium enterprises in terms of the number of employees and turnover as well the companies with foreign capital. However heads of companies with local capital assess and the small companies the present economic situation and future perspectives see rather pessimistic.

According to the opinion of Citadele Bank’s experts, this can partly be explained by the fact that economic recovery processes in the most important export markets for Latvia – Scandinavian countries, Germany and Russia – are taking place at a greater pace therefore companies related with these countries have good grounds for looking toward the future with greater hope. Local companies that work only in the Latvian market, on their part, face challenges in re-orienting their business to other types of entrepreneurship or expanding their sales to other markets. Entrepreneurs frequently view development of new business directions with certain cautiousness because that involves assuming new risks.

In accordance with the research results large and medium enterprises are more prone to approve of their turnover, profitability, general financial situation as well as economic activities taking place in their represented and in the State on the whole.

80% of the polled heads of companies evaluated taxing changes carried out in the end of 2010, such as increase of VAT and the minimum wage as well as other measures, as negative, besides 44% assessed these changes as strictly negative. Entrepreneurs substantiated this opinion with the fact that changes in the taxation system are going to leave a negative impact on the operation of the companies run by them.

Two thirds or 66% of company heads indicated that during the first 6 months of 2011 they do not plan to change salaries of their employees but 13% of entrepreneurs state that they are planning to increase them slightly; most frequently this was indicated by heads of large enterprises and companies with foreign capital.

Citadele Index research is conducted on a quarterly basis in order to find out entrepreneurs’ evaluation of the present situation and prognoses for the next 6 months in such fields as general economic activity in the State and corresponding business field. The previous research which was carried out in last December polled 750 heads of companies of various sizes from all regions of Latvia representing various spheres of national economy.

About Citadele Bank
Citadele is the largest local Bank in Latvia with branch offices in other countries. AS “Citadele Banka” was established to inspire people and enterprises to growth and enhance regional development. It is the only collaboration partner of American Express® in Latvia and Lithuania who is entitled to issue American Express credit cards. Presently, 75% of its shares are owned by Privatization Agency and the European Bank for Reconstruction and Development possesses 25% plus one of its shares. The value of Citadele Bank’s assets is 1.4 billion Lats.