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Tuesday 28.02.2017 | Name days: Skaidrīte, Justs, Skaidra

Dombrovskis: international economic situation has worsened

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«Combating grey economy is the foremost priority. We know the government has a number of measures. We can only wish them the best,» – said European Commission Vice-President Valdis Dombrovskis in response to the question as to how it is possible to overcome the tax revenue crisis in Latvia.

In his interview to, Dombrovskis said the European Commission usually does not provide guidelines or recommendations when it comes to the general tax burden across the EU. «Recommendation that we usually give to member states is usually the following – it is important to divert the tax burden from labour force, especially from low-paid sectors, to areas that are less important to growth – consumption, real estate and capital,» – said Dombrovskis.

Governor of the Bank of Latvia Ilmars Rimsevics had said last week that Latvia should be prepared for a new crisis, as economic development in Latvia and the European Union continues to decline. When asked if Latvia and the EU are truly close to a new crisis, Dombrovskis said that Latvia’s economic development generally continues. According to estimates from the European Commission, Latvia’s economy will grow 3.1% this year. The average economic growth across the EU is planned at 1.9% in 2016. Latvia’s expected growth is more rapid than that of other Baltic States. It is also well above the average EU index. It is true, however, that the general economic situation in the world has worsened since the last economic outlook. The world’s economic growth predictions have been corrected downwards. The situation in countries close to the EU remains unstable – this applies to Northern Africa, the Near East and Eastern Ukraine. «Of course, those arguments should be taken into account when assessing future growth perspectives. It is possible that both the EU and Latvia will have to correct their economic expectations,» – said Dombrovskis.

Some economists in Latvia believe economic growth has begun to stagnate. Dombrovskis, on the other hand, notes that the current economic outlook – 3.1% is the most rapid economic growth in Baltic States. «We can always use a more rapid economic growth rate in Latvia and the EU,» – he said. ‘EU’s economic policy’s priorities – improvement of investments, structural reforms to help enhance competitiveness and fiscal policy are all aimed at speeding up economic growth rates.’

When asked about the main challenge for the University of Latvia in regards to improving the country’s development, Valdis Dombrovskis noted: «The main challenge is to prepare specialists that would contribute to Latvia’s national economy. It is one of the main objectives for vocational and higher education – adapting education system’s offer to demand of the labour market.»

Dombrovskis also mentioned the role of scientists in the development of economic idea: «In relation to the development of the economic idea, humanitarian sciences – it is always the country’s function to provide support. It does not provide a direct and instantaneous economic effect, but it is no less important to the country’s long-term development – for research and innovations.»


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