Despite Latvia's strong economic growth inflow of FDI remains unsteady

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RIGA, Jan. 9 (Xinhua) -- The inflow of foreign direct investment (FDI) into Latvia slowed last year amid persistent concerns about corruption risks in the Baltic country's public sector, increasingly severe labor shortages and inefficient public administration, shows a new survey of foreign investors doing business in Latvia.

On Wednesday, the Foreign Investors' Council in Latvia (FICIL) released its fourth annual FICIL Sentiment Index, which shows that foreign entrepreneurs are still feeling fairly comfortable in Latvia as they enjoy a period of fast economic growth.

However, if not dealt with, long-standing problems like depopulation and unavailability of labor force, corruption and financial crime, unreported economic activity and education quality issues can not only leave Latvia without new FDI but also trigger an outflow of existing investment, FICIL warned.

According to the FICIL Sentiment Index 2018, more than half (55 percent) of the surveyed entrepreneurs said they were planning to increase their investments in Latvia, 35 percent said they were not going to invest more and 10 percent were still undecided.

The share of foreign entrepreneurs planning further investments in Latvia was 57 percent in 2017 and 50 percent in 2016.

During the first nine months of 2018, Latvia received 365 million euros in FDI, which was half the figure a year ago, according to a year-end report released by the economics ministry.

The ministry also noted that the inflow of FDI into Latvia has been quite unsteady in recent years. In 2017, for instance, FDI increased fourfold over 2016 to 650 million euros, or 2.4 percent of gross domestic product (GDP), mainly due to sizable investments made by non-residents. (1 euro = 1.15 U.S. dollars). Enditem

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