bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 20.11.2017 | Name days: Anda, Andīna
LatviaLatvia

FM reduces Latvia’s GDP growth outlook for 2016

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUFollowing the beginning of preparations for the 2017 state budget project, Finance Ministry has actualized macro-economic indexes outlook for 2016-2019. According to the new outlook, Latvia’s economy is expected to rise 2.5% in 2016 and 3.5% in 2017.

Compared with previous outlooks that were used as a base for Latvia’s Stability programme 2016-2019, GDP growth outlook for 2016 has been reduced by 0.5 percentage points. Economic growth will be slower in 2016 in comparison with 2015. In 2017, economic growth will become more rapid, as reported by Finance Minister.

The situation on external markets has improved not as well as previously expected. Slower activity in terms of investments means economic growth will reduce slightly for the beginning of 2016. Private consumption will remain the main driving force behind growth. It will be enhanced by wage and employment growth. Following restoration of realization of funding from European Fund in the second half of the year, economic growth rate will become faster in multiple foreign trade partner countries. It will ensure more balanced economic growth and more rapid GDP growth rates in 2017.

Thanks to the decline of prices on oil and other raw materials on the global market, prices on energy resources and food products also declined in Latvia. Inflation remains low – 0.0%. Price rise is expected to become more rapid in 2017, reaching 1.6%.

Along with low inflation, powerful rise of pay will continue in Latvia in 2016. It will form 5.5%, but will be slightly lower in comparison with previous years, when actual pay rise exceeded 6%. Average gross wages, according to Finance Ministry’s estimates, will reach EUR 863 and EUR 910 in 2017.

Negative risks are largely related to the possible worsening of the geopolitical situation and low global economic growth, including the possibility of Brexit. Internal risks include the low investments level and unbalanced pay rise.

It should be added that the Fiscal Discipline Council has approved Finance Ministry’s macroeconomic predictions that will be used for Latvia’s medium-term budget contents for 2017-2019. To support government’s work on the development of budget-related documents – stability programme and medium-term budget contents. An agreement was reached in February in relation to FM macroeconomic outlook.

«Reviews of Latvia’s growth outlooks will continue. This situation is found not only in Latvia; the majority of countries around the world are expected to experience decline of economic growth,» – explains GDP work group manager Martins Kazaks. Generally speaking, the Fiscal Discipline Council does not object to FM’s developed outlook in relation to the development of contents for the next three state budgets. The main risks are tied to FM’s intention to begin rapid use of EU funds in 2017 in hopes of enhancing GDP growth and investments. According to recent experience, however, shows that finances provided by EU funds have a tendency to enter the economy closer to the end of the planning period, which is expected to be around 2018-2022.

Downward correction of GDP growth potential will definitely create problems for the development of the state budget for 2017. The new economic assessment does seem more realistic now in comparison with predictions that were voiced a couple of months ago. The new view shows a complicated economic environment and the necessity to accomplish strengthening of the economic growth potential, the council notes.

Ref: 102.109.109.7623


Leave a reply

European Parliament triggers punitive procedure against Poland

Members of the European Parliament have passed a resolution requesting for the application of the so-called «nuclear option» for Poland, Article 7 of the EU Treaty, because of the threat to the rule of law in the biggest Eastern European country.

BNN summary of the week: medicinal cannabis in Lithuania, cargo anti-record, and Lemberg’s dwindling influence in UGF

BNN offers a summary of this week’s topical news in a variety of categories: Fight; Growth; Truth; Future and Opinion.

NAF: Russia’s attitude remains unfriendly towards Latvia

So far Russia’s demonstrated attitude has remained unfriendly towards Latvia, said Commander of Latvian Armed Forces Leonīds Kalniņš in an interview to LNT.

Lembergs’ turn to testify before parliamentary committee has come

Aivars Lembergs, who is accused of serious crimes and is suspended from performing duties as chairman of Ventspils City Council, has been invited to come to a meeting of the Saeima’s Investigative Committee and answer questions associated with so-called oligarchs case.

How Latvian communities around the world plan to celebrate Latvia’s birthday?

«Celebration of independence of the Republic of Latvia is an important tradition that allows members of Latvia’s diaspora to maintain ties with their homeland – this year’s event will be even more expansive and inclusive than ever before. This is because events associated with the country’s hundredth birthday will be organized all around the world,» says manager of World Federation of Free Latvians office in Latvia Jānis Andersons.

European Parliament triggers punitive procedure against Poland

Members of the European Parliament have passed a resolution requesting for the application of the so-called «nuclear option» for Poland, Article 7 of the EU Treaty, because of the threat to the rule of law in the biggest Eastern European country.

Wage rules violations most often associated with envelope wages

To promote public awareness and improve commercial environment, honest competition and honest compliance with taxes, Latvia’s State Revenue Service intends to expand its database with new information about taxpayers, BNN was told by SRS.

Management of Unity’s Saeima faction to change in December

«Political consultations with all of Unity’s partner parties that are represented in the Saeima’s faction have concluded. An agreement has been reached to perform management change before the end of Saeima’s autumn session – around 21 December,» says Unity’s chairman Arvils Ašeradens.

EP prepared to commence talks with EU governments on reforming asylum system

The European Parliament is prepared to commence talks about reforming Dublin Regulation to ensure every member state is able to resettle a portion of asylum seekers.

Estonia to pour into Finnish-Estonian cultural fund 700 000 euros

Estonian cabinet of ministers has decided to attribute 700,000 euros to the Finno-Estonian Cultural Fund, an organisation working since 2015 aimed at fostering cooperation between the two states in culture, creative economy and training both for individuals and organizations.

Russia in UN vetoes extension of Syrian chemical attack investigation

At the UN Security Council, Russia has used its veto powers to block a resolution with which it would be allowed to continue the international investigation into a chemical attack this spring in Syria, which prompted the U.S. to launch missile strikes on a Syrian airbase.

Latvia’s birthday expected to be windy

A precipitation zone will reach Latvia from the west on Friday, 17 November. The precipitation zone will, however, pass over Latvia quickly, making rainfall short and periods of clear sky more frequent and longer. Air temperature is expected to stay within +5° C… +8° C, as reported by State Environment, Geology and Meteorology Centre.

State of emergency in force in flood-hit Greece

Rescue services in Greece are looking for no less than five people, who have gone missing following unexpected and disastrous floods on Wednesday, November 15, that killed 15 people; however, bad weather is still expected.

Laupīšanas 101 director: Latvia’s film industry has yet to reach its potential height

There is sufficient evidence to prove that Latvia’s film industry is capable, but at the same time many films are directed basically the same way. There is a lack of creativity, which means very slow development for the industry, said Kaspars Marhlevičs, director of short comedy Laupīšanas 101, in an interview to BNN.

Medical cannabis bill paves way in Lithuanian legislature

Otherwise conservative Lithuania has made a big stride forward legalising cannabis for medical use with 92 Lithuanian parliamentarians voting Thursday, November 15, to open the bill draft on medication containing cannabis. The law draft should go back to the parliamentary floor for deliberations on December 12.

Latvian sentenced to ten years in prison for fighting on the side of ISIS in Syria

On Thursday, 16 November, Latvian citizen Mārtiņš Grīnbergs was sentenced by Riga Regional Court to ten years and three months in prison for fighting on the side of Islamic State terrorist organization.

European Parliament: Africa’s development requires a new stimulus

To resolve economic, social and migration-related problems, which usually accompany lasting crises, better African-EU cooperation is needed, European Parliament members say.

Latvian Chamber for Commerce and Industry proposes preventing new MPC reforms

Increase of mandatory procurement components cannot be allowed. Exactly the opposite – this cost should be dropped entirely for end electricity prices in an attempt to improve international competitiveness of companies, BNN was told by council members of Latvian Chamber for Commerce and Industry.

Matīss: LDz cannot raise tariffs and perform rail electrification under cargo anti-record

Because Latvijas dzelzceļš has set an anti-record in cargo transports in the first ten months of this year, Saeima deputy and member of the National Economy Committee Anrijs Matīss says raising the fee for the use of infrastructure cannot be allowed. He adds that the intended railway electrification project should be considered very carefully.

Lithuania and Latvia placed in top 10 in climate policy index

In the annual Climate Change Performance Index, where climate policy action in 57 countries has been evaluated, on a scale from «very high» to «very low», 11 EU member states have been evaluated with as having been highly active, with Sweden showing the best results ahead of Lithuania, the UK, Finland and Latvia.

Bite Latvija buys Stream Networks and Latnet

Mobile commutations operator Bite Latvija has signed a purchase agreement for 100% of shares of Stream Networks and its subsidiary Latner Serviss, as BNN was informed by Bite manager in Latvia Kaspars Buls.

airBaltic carried three million passengers in first ten months of 2017

In the first ten months of 2017, airBaltic carried a total of 3,007,034 passengers to destinations in Europe, Scandinavia, Russia, CIS and the Middle East, BNN was told by the company.

Kaljulaid sees African opportunities to outplace EU in digitalisation

During a visit to Ethiopia, Estonian President Kersti Kaljulaid has discussed African-EU relations with the African Commissioner for Trade and Industry and recommended investing into digital development that would be beneficial for the continent itself.

Most employed people in Latvia are satisfied with their jobs

More and more often employers experience lack of qualified labour force, as well as increase of employees’ confidence about their competitiveness on the labour market and their openness for better job offers.

Estonian railways operator happy about increasing freight volume

Freight carried on the infrastructure of the Estonian state railway company Estonian Railways in October amounted to one million tons, which is a 10.4% hike compared to October 2016.