bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 25.05.2018 | Name days: Junora, Anšlavs
LatviaLatvia

Economic Diary of Latvia. An interesting turn of events

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvian parliamentary budget committee has finally approved the state budget plan for 2016 this week. This means deputies of the Saeima’s profile committee have given the main budget document a high grade. Unfortunately, Ilmars Rimsevics, Governor of the Bank of Latvia, does not share the government’s optimism.

Rimsevics believes the budget plan requires some significant improvements. The main one at that is the reduction of expenses. According to Rimsevics, the budget has not right to have deficit, as unnecessary expenses only service to put future generations in debt. «We pay in the form of interest that could have been invested in business development,» – said the governor of the Bank of Latvia.

Rimsevics is certain that it is necessary to carry out in in-depth evaluation of the state budget and develop a ‘zero budget’. Instead, however, the government decides to increase revenue at the expense of increasing taxes, which makes the country’s economy less competitive. Furthermore, constant tax changes undermine the trust of investors and take away their plans to invest money, added Rimsevics.

Rimsevics believes Latvia’s debt is relatively big for such a small economy. The only way to overcome the crisis with a debt of such size is by sorting out the country’s finances.

What is interesting is that, according to information from the State Treasury, the situation is not as dramatic. Yes, the total size of Latvia’s debt has increased: from EUR 8.2 billion in Q2 2015 to EUR 8.65 billion in Q3 2015. According to information from the Central Statistical Bureau of Latvia, there were 1,976,500 people living in Latvia in October. With that, the debt per capita is EUR 4,330 (EUR 4,148 in the previous quarter of the year). Unpleasant to be sure, but, considering the amounts some people owe to banks already, this debt seems laughable.

The debt is not as scary as people say

In addition, according to information from Eurostat, Latvia’s state debt was 35.3% of GDP at the end of Q2 2015. It is the fourth lowest index across EU member states, where the average level of state debt is around 90%. State debt situation is only better in Estonia (9.9% of GDP), Luxembourg (12.9%) and Bulgaria (28.3%). Lithuania’s state debt is equal to 37.6% of GDP.

As previously reported by BNN, the state budget for 2016 provides for revenue worth EUR 7.37 billion and expenses – EUR 7.65 billion. Compared with 2015, budget revenue is expected to grow EUR 114.2 million and expenses – EUR 183.2 million.

According to the budget plan, maximum state debt volume must not exceed EUR 10.1 billion at the end of 2016. The GDP itself is expected to reach EUR 26.13 billion and the allowed budget deficit – 1% of GDP.

Something about liberalization

It has become known this week that Lithuania plans to sell a test-shipment of gas to Latvia in 2015. Litgas has provided its offer to Latvenergo. As confirmed by Litgas CEO Dominikas Tuckus, the test-shipment may be as big as one or several million m3 of gas. Latvenergo will be able to procure gas from Lithuania thanks to rules of use of natural gas infrastructure approved by the Public Utilities Commission on 10 September.

Latvian Economy Minister Dana Reizniece-Ozola has mentioned this week that there is no time for delays with gas market liberalization plans. Among other things, she accused the local monopoly -Latvijas gaze – of blackmail. She also said because Latvia currently receives supplies of natural gas from a single source (Gazprom), there is no choice. With that, Latvian consumers pay 10% more for gas.

In order to create a competitive environment on the gas market, Reizniece-Ozola signed a cooperation memorandum with Lithuanian Energy Minister Rokas Masulis in order to diversify supplies of natural gas and develop an open market. The topic of supplies using Klaipeda LNG Terminal was also mentioned. As mentioned by Reizniece-Ozola, having multiple sources for supplies of natural gas will not only increase the security potential in case of crisis but will also help increase the country’s energy independence.

According to unofficial data, Litgas intends to sell gas bought by Lietuvos duju tiekimas from Gazprom. Liquefied natural gas sold by this company currently costs nearly EUR 33 MW/h, while Gazprom’s fuel costs around EUR 20-21 MW/h.

Ref: 017.109.109.4849


Leave a reply

Dutch and Australian governments believe Russia responsible for MH17 tragedy, say Netherlands

Over the crash of the Malaysian passenger airline in Ukraine that took the lives of 298 people, the Dutch government has stated on Friday, May 25, that it together with Australia holds Russia rosponsible for what they saw as its downing with a missile.

Finance Ministry: growth observed for general budget revenue in Q1

In the first four months of 2018, Latvia’s general budget revenue had exceeded expenditures, forming a surplus of EUR 239.9 million, which is EUR 69.2 million more when compared to the same period of last year. A surplus formed for the state consolidated budget (EUR 160.1 million) and municipal consolidated budget (EUR 79.9 million), as reported by Finance Ministry.

Irish voters at ballot boxes in abortion referendum

Ireland's abortion referendum is taking place on Friday, May 25, as the mostly Catholic nation is asked if they wish for a strict ban on abortion to be upheld. Canadian-British news agency Reuters reported on Friday, May 25, that according to opinion polls Irish voters are set to overturn one of the world’s strictest prohibitons on pregnancy terminations. Voters in the once conservatively Catholic nation will be asked if they wish to lift a prohibition that was written in the constitution by a popular vote in 1983, and eased in 2013 for cases, where the mother’s life is in danger. As to the protection of «traditional» family values Ireland, allowed divorce by a small majority only in 1995, but three years ago became the first country in the world to adopt gay marriage by a referendum.

Police in Kuldiga confiscate 3.3 million illegal cigarettes; shut down illegal alcohol production to boot

Kuldiga Country State Police have arrested one person on suspicion of illegal excise goods turnover and have confiscated more than 3.3 million illegal cigarettes, which is the largest volume police in Kuldiga have arrested so far. In addition, authorities have also shut down illegal vodka production, as confirmed by State Police.

Flats built in Tallinn, construction volume in Estonia up by 21%

Construction companies in Estonia have in the first three months of 2018 expanded their production by 21%, Estonian statisticians have estimated.

Latvian Healthcare Ministry promises to improve chronic patients’ care

To improve chronic patient care, Latvia’s Healthcare Ministry has developed a project of rules that will govern the order in which the state pays for medical treatment of chronic, cancer and cardio-vascular diseases in medical institutions.

Weekends in Latvia expected to be hot; air temperature may reach +28° C

This week’s Saturday and Sunday will be hot in Latvia. Aside from summer-like weather, this also means increased possibility of fires, as reported by Latvia’s State Environment, Geology and Meteorology Centre.

Sweden recognises sex without active agreeing rape

Sweden has passed a new law saying that sex without consent is rape, even when there are no threats or force involved, stating that passivity is not a sign of agreeing to sex.

EU member states begin enforcing General Data Protection Regulation

Starting with Friday, 15 May, all European Union member states start enforcing the General Data Protection Regulation, which provides stricter requirements for personal data processing.

Pyongyang after U.S. refusal still willing to enter negotiations

Pyongyang has stated that North Korea was still ready to engage in talks at any time in any form after U.S. President Donald Trump unexpectedly cancelled his meeting with the head of North Korea, Kim Jong-un.

Lithuania moves forward with tax and pension reform

The heavily amended bills on taxes and pensions will have a significant impact on the Lithuanian citizens’ lives if Seimas, the country’s legislature, approves for them in their current form.

Riga City Council decides not to discuss matter of anti-corruption measures in Rīgas satiksme

Failing to reach a consensus on whether or not the matter regarding anti-corruption measures in Rīgas satiksme should be viewed behind closed doors, Riga City Council’s Security, Public Order and Corruption Prevention Committee decided to postpone its review.

Latvian companies in Vietnam to be provided with stable tax payment regime

Latvian businesses working in Vietnam are to be provided with a stable tax-payment regime that will not be subject to amendments of Vietnam’s regulations.

Saeima conceptually supports law amendments to reduce PIT debt formation

On Thursday, 24 May, Latvia’s Saeima approved in the first reading amendments to the Personal Income Tax Law that were proposed to reduce the possibility of PIT debt after application of differentiated non-taxable minimum or progressive rate on income, explains Saeima press-service.

Minister: unemployment is no longer Latvia’s main challenge

Latvia’s main challenge is no longer unemployment, rather the lack of qualified work force, said Welfare Minister Jānis Reirs at the opening of «Employment in Latvia yesterday, today and tomorrow» conference.

MH17 investigators: plane downed by Russian military unit

Dutch prosecutors, who are investigating the tragic crash of the Malaysian passenger plane that fell down in eastern Ukraine in 2014 taking the lives of 298 people, have stated that it has been downed by a missile released by a unit of the Russian Armed Forces.

Latvian Saeima gives green light to improve anti-doping regulation

On Thursday, 24 May, Latvia’s Saeima supported amendments to the Sports Law that provide for improving anti-doping regulation in the country and improve the autonomy of the anti-doping organization through the establishment of Latvian Anti-Doping Bureau, as confirmed by Saeima’s press-service.

Lithuania to host summit of women political leaders

Lithuania and its President Dalia Grybauskaitė will host the 2018 summit of the forum of Women Political Leaders, which is to take place in Vilnius from June 6 to 8.

Green energy becomes more and more attractive for Latvian residents

As technologies continue developing, the use of green energy gradually becomes more and more attractive to Latvian residents. The majority of respondents note that they may start using biomass, solar batteries and even wind turbines in the next ten years, according to results of Baltic International Bank’s latest Latvian Barometer.

Tartu railway routes operating again, system recovery from fire worth millions

In Estonia, railway traffic around the second city of Tartu interrupted last week by a cable fire has been restored with a temporary solution. To fully restore the automatic system, Estonian Railways estimate, millions of euros could be spent.

Committee chairman: municipalities’ involvement in state re-emigration policy is vital

«It is necessary to establish local governments’ responsibility in the country’s general re-emigration policy, because their role is vital. It is also important to involve the private sector. Re-emigration is not just a responsibility for regional coordinators; it is also a complex venture in which we should divide responsibility,» says chairman of Saeima’s Citizenship Committee Ritvars Jansons.

EC nearly to allocate half of next year’s budget to support economic growth

On Wednesday, 23 May, European Commission initiated approval of European Union’s 2019 budget project for EUR 166 billion, making EU’s next year budget 3% larger.

Yulia Skripal in first filmed statement: «We are very lucky to have survived»

Yulia Skripal, one of the victims of the Salisbury poison attack, has expressed her sentiments in her first filmed statement since the attack that has increased the diplomatic isolation of Russia as it is seen by many countries to have been highly likely linked to the attempted murder of Yulia and Sergei Skripals.

Latvia to refinance debt with lower interest rates

Latvia has released simultaneous two-term euro bonds for a total amount of EUR 650 million on international markets, as confirmed by State Treasury.

Italian head of state accepts Conte's candidacy for post of Prime Minister

In Italy, President Sergio Mattarella has accepted the candidacy of a political novice for the post of the Prime Minister chosen by two parties that seek both to lower taxes and renegotiate Italy's foreign debt.

Newest comments