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.
Conclusion
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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An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit. In the financial sense, this includes the purchase of bonds(1), stocks or real estate(2) property. Additionally, a constructed building or other facility used to produce goods can be seen as an investment. The production of goods required to produce other goods may also be seen as investing. Taking an action in the hopes of raising future revenue can also be considered an investment. For example, when choosing to pursue additional education, the goal is often to increase knowledge and improve skills in the hopes of ultimately producing more income.
