RIGA, April 22 (LETA) - Total investments in the Latvian economy should amount to EUR 3.7 billion this year, according to the Economics Ministry's report presented to the government on Tuesday.

The report says that the Latvian Investment and Development Agency has to attract EUR 1 billion in investment projects this year, and another EUR 1.5 billion is to be raised by lending and private investment.

The Economics Ministry's report says that the plan for the development of the capital market and access to finance in the economy envisages increasing the balance of loans issued to non-financial companies from 14 percent to 17 percent of gross domestic product by 2029, while the amount of foreign direct investment accumulated in the capital of Latvian companies should rise to EUR 32 billion.

This requires stimulating lending by commercial banks, exploiting public-private partnership opportunities, developing scalable investment projects, using the sandbox approach to attracting new market players, involving pension funds in financing development investments by Development Finance Institution Altum, and fostering pension funds' investment in Latvia.

The report also says that EUR 200 million is to be invested in the defense industry this year. According to the Economics Ministry's plan, EUR 43 million will be made available from a state-financed investment fund for the production of military use goods, and a new support program for the development of defense industry projects worth EUR 150 million will be launched this year.

The Economics Ministry points out that local companies' involvement in major contracts of the National Armed Forces should be increased to 30 percent, and turnover of the defense industry companies should rise twofold to EUR 1.3 billion.

According to the Economics Ministry, the European Union's funds and private co-financing for business development should increase by EUR 800 million this year, while EU investment and private co-financing for rental housing and building insulation should increase by EUR 200 million.

At the Cabinet meeting, Foreign Minister Baiba Braze (New Unity) said that Latvia should be prepared for different scenarios regarding the United States' tariffs. She also called on ministers to take businesspeople from the relevant industries with them when going on bilateral visits abroad.

At the same time, Braze believes that cooperation with the United States and deepening relations between Latvia and the United States is and will remain a priority.

Defense Minister Andris Spruds (Progressives) said that the report's priorities were sound and the objectives in the development of the military industry were clear.

Culture Minister Agnese Lace (Progressives) pointed out that, from the standpoint of the cultural sector, it was important that creative industries were seen as significant contributors to growth. Specificities of these industries have to be taken into account in designing various support instruments, said Lace.

Education and Science Minister Dace Melbarde (New Unity) said that it was important to strengthen STEM and STEAM at all levels of education, to bring vocational education closer to the labor market, and to link state-funded scholarships in higher education to the needs of the relevant industries.

According to Melbarde, much more needs to be done to build more responsive education programs that react quickly to market changes, introducing modular programs. There is also a need to develop basic digital skills, said the minister.

At the same time, Melbarde believes that higher education institutions are insufficiently involved in human resource development strategies, and this should be a focus for the future.

Arta Dimbiere, representative of the Latvian Employers' Confederation, pointed out at the government meeting that the Economics Ministry's report should include concrete steps for attaining the ambitious goals.

The Bank of Latvia's representative at the meeting said that partial listing of state and municipal companies on the stock exchange offered a yet-untapped opportunity, which would make it possible to attract funds from pension funds.