bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 24.06.2018 | Name days: Jānis
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.

Week in Lithuania. Parliament makes first step towards disclosing ex-KGB agents

The Seimas of Lithuania on Thursday, June 21, backed an initiative by the opposition Electoral Action of Poles in Lithuania – Christian Families Alliance to disclose now classified information on former agents of the Soviet KGB who voluntarily admitted their collaboration.

BNN summary of the week: CPCB visit to Saeima; ministers survive no-confidence votes; DTV case ends with mild penalties

BNN offers a summary of this week’s topical news in a variety of categories: Ruling; Future; Trust; Measures; Calendar.

SRS uncovers numerous violations more than half of inspected companies

State Revenue Service’s Tax Control Office performed a total of 305 thematic inspections of employers in Latvia in Q1 2018. Authorities recorded violations in 171 inspections, according to information from SRS.

Third level pension plan deposit volumes reach new record value

Residents’ interest for pension savings remains high. The volume of deposits made to private pension funds in the first three months of 2018 has reached a new historic peak: a total of EUR 16.5 million has been paid to 3rd level pension accounts, which is 11.6% more when compared to the same period of 2017, as reported by Finance and Capital Market Commission.

Petrol station network in Latvia caught performing fraudulent activities with diesel fuel

State Revenue Service’s Tax and Customs Police have uncovered and put an end to a fraudulent scheme with diesel fuel performed by some network of petrol stations in Latvia, as confirmed by the service.

Kaimiņš: I believe CPCB is performing a political order

In the evening of Thursday, 21 June, Corruption Prevention and Combating Bureau released three people previously detained as part of a criminal process regarding possible illegal funding of KPV LV party – Saeima deputy Artuss Kaimiņš, his colleague Atis Zakatistovs, and businessman Viesturs Tamužs.

Latvia’s parliament conceptually supports new sanction regulations

On Thursday, 21 June, Saeima supported in the final reading amendments to the Law on International Sanctions and National Sanctions of the Republic of Latvia that are meant to improve sanction regime regulations to ensure efficient application of national and international sanctions, as reported by Saeima press-service.

Storm in Tallinn floods streets, cuts Croatia-Argentina match short on TV

A rain storm has hit northern Estonia on Thursday, flooding some streets in the capital Tallinn, damaged buildings and badly affected the broadcast of an interesting World Cup game.

American banks tested for financial stress show positive results

The U.S. has performed banking stress tests and found that the 35 largest banks operating in the country have enough funds on hand to sail safely through a severe financial crisis.

Saeima fires judge for coming to work in a drunken state

On Thursday, 21 June, Latvia’s parliament supported the proposal to dismiss Rezekne Court judge Arvis Garais from his post. 71 deputies voted in favour, no one abstained and no one voted against.

UK to have three requirements to EU citizens willing to remain in UK

For citizens of the European Union willing to continue living in the UK after the country leaves the bloc, they will have to submit applications and answer three key questions over the internet, according to the country's interior minister.

Weather in Latvia to be rainy and cool during Ligo; next week’s weather to be dry and hot

Weather at the end of the week in Latvia will be dictated by a cyclone. Because of that, there will be instances of rain on Ligo. Weather is expected to improve next week, however, according to Latvia’s State Environment, Geology and Meteorology Centre.

Lithuania’s blood plasma corruption scandal extends to Latvia

The former head of Lithuania‘s National Blood Centre, suspected of corruption and involvement in unlicenced activity, received more bad news this week from Latvia, where investigators of the Lithuanian Special Investigation Service had questioned the Latvian Health minister, Anda Čakša.

Administrative burden to be reduced for foreign students and researchers

The administrative burden will be reduced for foreign students and researchers, as well as all education and research institutions hosting them. This is provided by the amendments to the Immigration Law approved by the Saeima in the third reading on Thursday, 21 June.

Latvian Economy Minister endures no-confidence vote

Saeima declined opposition deputies’ request for dismissal of Economy Minister Arvils Ašeradens.

Swedbank economist becomes new member of Bank of Latvia Council

On Thursday, 21 June, Latvia’s Saeima approved Mārtiņš Kazāks in his new post as member of Bank of Latvia Council, as confirmed by Saeima’s press-service.

Pope Francis’ visit to Latvia will be a national holiday

Latvia’s parliament has approved in the final reading a law that makes 24 September – the day Pope Francis plans to visit Latvia – a national holiday.

ICT specialist numbers in Latvia are below Europe’s average level

In Latvia, information and communication technology specialists form only 2.2% of all employed people in the country, which is considerably below the average level in the European Union – 3.7%. Romania and Greece are the only two EU member states in which the number of ICT specialists is below Latvia’s, according to European Commission’s DESI index.

Hungary adopts prison sentence for helping migrants

Hungarian National Assembly has passed a set of laws criminalising with prison terms some help provided to illegal immigrants by non-governmental organisations.

Harmony plans turning to Constitutional Court to prevent transition to Latvian language in schools

«Why should this reform stay unrealized? It is because schools are not prepared for cardinal changes coming from dozens of other reforms that have already shocked the country’s entire general education system,» says chairman of National Minority School Parents Forum and member of Harmony’s work group in Konstantīns Čekušins.

Deputies detained in KPV LV criminal case not declared suspects yet

Saeima deputy Artuss Kaimiņš and businessman Viesturs Tamužs detained in the criminal process regarding possibly illegal funding of KPV LV party have not yet been declared suspects. Both are currently in police custody. It is likely Kaimiņš will be released later today, 21 June.

Production of mines and grenades planned in Estonia

As the Estonian parliament has adopted new rules on military arms and ammunition production in the country, local defence firm Eesti Arsenal has voiced its plan to build a factory in Estonia to make military explosives.

Total tax debts in Latvia reached EUR 1.224 billion in June

At the beginning of June, total tax debts in Latvia, including topical, halted debts and extended repayment terms were equal to EUR 1.233 billion, which is 0.6% less compared to May, as reported by State Revenue Service.

Switch off internet nationwide during exams – Algerian approach

In an attempt to prevent cheating during secondary school exams, the north African nation Algeria, has turned off internet in its whole territory.

Control Service proposes kicking out shell companies as intensely as offshore companies

Shell companies in Latvia should be combated with the same intensity once shown to offshore companies, says chief of Anti-Money Laundering Service Ilze Znotiņa.

Newest comments