bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 19.08.2017 | Name days: Melānija, Imanta
LatviaLatvia

Prime Minister: Latvia's GDP to grow 4.2% next year

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU“Every state budget plan is unique in its own right. However, not every budget can be considered truly a historic feat. The budget of 2014 can be categorized as a true feat because of three reasons,” – says Prime Minister Valdis Dombrovskis.

“First of all, this is the first budget of Latvia that is compiled in euro currency. Only this factor makes this budget unique. Any new beginning is as though a new line in a text. Latvia’s lat, as a currency, is left behind. It will not fade away – it will become a foundation for Latvia’s membership in Eurozone. The girl depicted on LVL 5 coins of the Republic of Latvia will be seen on a new currency. This currency is considered common for 332 million residents of Europe. Without a doubt, lat has played a large role in our country’s economic recovery and development. Throughout its existence, lat has been stable and helped out country’s economy recover from the economic crisis. However, lat can be as stable as euro when tied to it. We have noticed in resent past what happens when lat’s stability is put into question, when different “smart guys” call for devaluation and perform speculative attacks on lat. Euro adoption will make sure something of the sort never appears again. It will diversify and strengthen Latvia economic and financial stability,” – PM says.

Secondly, according to Dombrovskis, the budget plan for 2013 complies with the beginning of the National Development Plan for 2014-202 and the new EU fund planning period. Thirdly, this is the first budget of Latvia that actually employs medium-term budget planning measures.

“Global economy has recovered from the crisis and continues to grow moderately. Data of Q2 of 2013 provide optimism regarding countries like USA, Germany, France, Japan and England. However, the latest outlook of the International Monetary Fund (IMF) forces projections to be corrected for possible reductions. Judging from latest trends and information from the leading analytical organisations – IMF, European Commission, OECD – it is expected that global economic growth rates will gradually grow in the next couple of years. Nevertheless, this process will likely be more moderate than it was before the crisis. Slower growth rates are mainly due to lower development rates of countries,” – says the PM.

“Optimism in regard to perspectives of Latvia’s economy lies in the fact that economic growth of Latvia’s main trade partners – Lithuania, Estonia, Russia, Germany and Poland – is much stronger than the average in the EU. This partially explains the resistance of Latvia’s economy against external shocks and its strong economic growth rates. It is expected that this trend will be carried on to future years, strengthening Latvia’s position as one of the strongest economies in the EU.

One of the largest risks is the economic and political situation in Russia. IMF and the World Bank have reduced Russia’s GDP growth outlook to 1.8% (previously 3.3%). This is explained with a rather strong backlash in global economy in relation to slightly reduced oil prices and trade volume drop. It is also affected by the Sochi Olympics 2014 project and Nord Stream. Even though the outlook of IMF regarding Russia’s GDP growth is set at 3.1% for 2014, there is a possibility that the country’s economic growth will be at risk, because it still depends on prices of raw materials in global markets. The current Russian-Lithuanian milk war is a good example how diversification of export goods can impact national economy’s development,” – says Dombrovskis.

Latvia’s GDP is expected to grow 4.2% next year. This means Latvia will remain the most rapidly growing economy in the EU for a third consecutive year.

“Latest data for 2013 suggest a slight drop in development rate. Domestic consumption has become the leading economic growth engine, which is based on good results in the job market. The drop in investments poses a serious threat to national economy. Export growth rates have declined significantly. Import growth rates have become negative. We will need to carefully follow macroeconomic developments and make necessary corrections in the next couple of years.

I will not say that we have entered a phase of happiness immediately after overcoming the crisis. There are concerns that we could become careless about our spendings. I do not think it will come as a surprise to anyone that the budget preparation process was tence and complicated. This is mostly because the euphoria had set in too soon as our economy started to grow again. Many politicians had forgotten that state budget is not a limitless resource. Given that many already want to spend money that has not yet been earned, I would like to call everyone not to make the same mistakes again.

We had been promised seven fat years in the past. But there were no more than two in reality. Trying to come back to the times of irresponsible expenses, it is not likely that we will have even a single year. We should keep in mind that rapidly growing expenses usually have a large impact on social areas and infrastructure. International financial markets have changed their crediting policies and now perform more critical risk assessments. Countries that try to carry out irresponsible fiscal policies are punished with high interest rates or are excluded from financial markets altogether,” – he added.

During his speech, he concluded that “budget of 2014 is aimed at bringing results for Latvia’s residents as soon as possible. This is planned to be achieved by helping the least socially protected group of residents and by raising salaries for those working in the social sector. Secondly, this budget project is aimed at growth and development, because it provides tax reduction and investments in the most competitive state industries and National Development Plan priorities. This lays the foundation for multiple national projects that will provide high-quality economic growth in the future. Finally, we will no longer think within the confines of one year. Instead we will plan our moves in a perspective of at least three years, which is an important factor for stability and state policy’s predictability.”

Ref: 102.109.109.9371


Leave a reply

  1. JPR says:

    It will grow MAYBE 2%.

    These figures are too high.

    Thumb up 0 Thumb down 0

Kirsis asks police to assess possible forging of votes at Riga City Council

Riga City Council’s Unity faction chairman Vilnis Kirsis has asked State Police to check if the city council’s electronic voting system was used without another deputy’s knowledge or consent, said the politician.

Expert: attack in Spain shows how terrorists switched to more easily reachable targets

Terrorist attacks that transpired in Spain this week shows how terrorists have switched to more easily reachable targets, where security requirements are not as strict, says Latvian National Defence Academy’s Security and Strategic Research Centre researcher Martins Hirss.

New mandatory tests in schools to be introduced four years from now

In four years’ time – 2021/2022 school year – it is planned to introduce completely new mandatory tests in schools, as reported by State Education Content Centre Director Guntars Catlaks.

Nearly 9,000 children and their parents got homes thanks to state support programme

In the first half-year of 2017, state support helped 1,527 families in Latvia to buy homes. Compared with last year, families’ demand for state support has grown 6%, as reported by Altum finance institute.

Prediction: Aseradens will likely take control over Unity

Economy Minister Arvils Aseradens will become the head of Unity, Betsafe bookmakers predict. The possibility of Aseradens becoming the head of the party is given 45% probability by Betsafe.

Provisional estimate for next year’s fiscal space in Latvia is EUR 60 million

Next year’s fiscal space has been estimated at EUR 60 million, as noted by Finance Minister Dana Reizniece-Ozola, adding that a more precise estimate will be available at the end of August.

Reconstruction of Vilnius airport runway concludes; aircraft return to Vilnius

On Thursday, 17 August, Vilnius airport’s runway was festively opened. This was the most massive reconstruction for the airport in the past 20 years. It was a unique project for Lithuania and all of Europe, airport representatives say.

Islamic State terrorist group takes responsibility for Barcelona attack

The recent terrorist attack in Barcelona, in which a shuttle bus rammed a crowd of people on La Rambla, killing 13 and injuring at least 100, has become this week’s topic.

Weather in Latvia to be warm but rainy on weekends

The sun will appear every now and then between clouds on Friday, 18 August. Still, some rain is expected, especially in the afternoon in Latvia’s eastern regions, where thunderstorms may appear. Rain is expected to reach the capital in the afternoon. Wind will draw in from the south. Air temperature will reach +21° C… +26° C, according to State Environment, Geology and Meteorology Centre.

Latvia’s export growth was moderately rapid in the first six months of 2017

Compared with the same period of 2016, Latvia experienced a moderately rapid export growth in the first six months of 2017, according to data published by Eurostat on Thursday, 17 August.

Latvia’s annual inflation in July was one of the highest in Europe

Inflation indexes in Latvia and the UK both reached 2.6% in July, which is one of the highest indexes in the European Union, according to data published by Eurostat on Thursday, 17 August.

Kirsis withdraws his candidacy in favour of Aseradens

Riga City Council member Vilnis Kirsis has decided to withdraw his candidacy from the race to become chairman of Unity in favour of a different candidate – Economy Minister Arvils Aseradens.

Rinkevics expresses Latvia’s interest in maintaining political consultations with Palestine

On Thursday, 17 August, Latvia’s Foreign Affairs Minister Edgars Rinkevics met with the leader of Palestine’s diplomatic mission in Latvia, ambassador Taissir Al Adjouri, to discuss mutual relations between Latvia and Palestine and the peace process in the Middle East.

Putin grins to the world’s seven billionth baby, Lithuania wary of border incidents

Russian President Vladimir Putin paid a visit this Wednesday to Kaliningrad, the westernmost point of Russia, but the reports about his trip in the Russian enclave and over the border in Lithuania were strikingly different.

Survey: red considered the safest colour for a car

Most Latvian drivers consider red to be the safest colour for a car. The most popular, however, is black, according to results of a survey by Virši-A fuel trader.

airBaltic’s number of carried passengers reaches a record in second consecutive month

Latvian airBaltic airline carried 393,312 passengers in July 2017, which is 21% more than the same period last year. The number of passengers carried by airBaltic remains the highest it has ever been in the airline’s history, BNN was informed by the company.

Brivais vilnis: nearly all fish processing companies are experiencing losses

Currently nearly all fish processing companies in Latvia are experiencing major or minor losses, says Brivais vilnis chairman Arnols Babris.

American helicopters to perform low-altitude flights within Latvia’s airspace

U.S. Air Force Brigade’s Task Force Phoenix helicopters, which are stationed in Latvia as part of Atlantic Resolve operation, will be performing low-altitude flights from 16:00 to 18:00 from Lielvarde to Dobele on Friday, 18 August.

Healthcare Ministry’s state secretary Karlis Ketners may be replaced

Latvian Healthcare Ministry may replace its state secretary Karlis Ketners. It is possible he will be transferred to work at Finance Ministry, as reported by LTV.

Suspects in Europe's insecticide egg scandal before Dutch court

In the Netherlands, two men have been in court in relation to the scandal of eggs containing banned insecticide that has caused an EU-wide health scare and cost millions of euros of damages.

Indian national with fake documents apprehended on Latvian border

An Indian citizen travelling from Moscow on a bus was caught at Terehovo border control point in Latvia for presenting officers a fake EU family member’s resident card. No criminal process was launched. The person returned to the country he was travelling from.

Latvijas dzelzceļš will not have to pay dividends from last year’s profits

The government decided on Wednesday, 16 August, that Latvijas dzelzceļš will not have to pay dividends from last year’s profits, which were EUR 880,998.

Latvian citizenship provided to 103 people

The Cabinet of Ministers has issued an order to provide Latvian citizenship to 103 people through naturalization.

Estonian Inbank's profits reach EUR 5.7 million in six months

Estonian financial services' provided Inbank made a profit of 5.7 million euros in the first half of 2017, which is a 429.4% increase compared to the respective period in 2016.

Agriculture Ministry invites residents to sign up for measures to support fisheries

From 21 August onward, Rural Support Service plans to start accepting applications for projects to receive support from European Maritime and Fisheries Fund’s action plan for development of fisheries in 2014-2020 as part of projects Innovation, Productive Investments in Aquaculture and Fishing and Aquaculture project processing.

Newest comments