Latviski English По-русски
Tuesday 23.01.2018 | Name days: Strauta, Grieta

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

(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.”


Leave a reply

  1. JPR says:

    It will grow MAYBE 2%.

    These figures are too high.

    Thumb up 0 Thumb down 0 initiative «On saving Agenskalns market» submitted to Riga City Council

An initiative started by Anda Baidekalna «On saving Agenskalns market» has been submitted to Riga City Council for review. More than 2,000 people signed in favour of this initiative on portal. Now Riga City Council will have to decide on approval of this initiative and develop a plan for development of Agenskalns market to preserve its functionality.

Estonian construction price rise influenced most by higher labour costs

Estonian construction price index grew by 1.5% in 2017 aligned with the average of 2016, Estonian statisticians calculated.

Latvian Economy Ministry proposes self-regulatory measures for postal sector

The problem with postal items lacking addresses can be resolved using self-regulatory measures in the postal industry, as mentioned in Economy Ministry’s prepared report on new measures and proposal for mechanisms to help make the work performed by the postal sector more efficient.

Venice tourists stunned over 1 100-euro restaurant bill

The leadership of the picturesque Italian town of Venice has pledged to ensure justice after four Japanese tourists complained of having been handed a 1,100-euro bill for steaks, water, service and a plate of fried fish.

Ratification of Istanbul Convention falls through in Latvia

Unity is the only one of the coalition parties in Latvia that has expressed support for the ratification of Istanbul Convention so far, politicians say.

Spain sees Puigdemont's trip to Denmark as provoking his own arrest

A judge of the Spanish Supreme Court has blamed Catalonia's former President Carles Puigdemont of seeking to provoke his own arrest by visiting Denmark from his country of exile, Belgium, as the politician faces charges carrying a possible prison sentence of up to 30 years.

Latvenergo: Latvia is the largest energy exporter in Baltic States

Latvia continues exporting electrical energy produced in the country – as of Monday, 22 January, it was 832 MW. Especially intensive energy production is recorded for Daugava’s hydro-electric power plants and Riga’s CHP plants. The largest import volume is registered for Lithuania, to which the amount of exported energy equals the amount consumed in Latvia, Latvenergo explains.

LALRG secretary general: we have to reduce gap in quality of life for EU citizens

Ever since Latvia joined the European Union, its population has declined 14%. The most significant decline was caused by the departure of residents of working age to other EU member states. Because of that, the population in eastern regions of Latvia has declined 23%.

Czechs up for close race in this week's presidential run-off

As the Czech Republic nears the second round of its presidential election this weekend, sociologists estimate that the pro-Western academic Jiří Drahoš enjoys a somewhat larger support than the incumbent Miloš Zeman, who easily won the first round.

Producer price level in Latvia’s industry up 3.1%

Compared to December 2016, the level of producer prices in Latvian industry rose by 3.1 % in December 2017. Prices of products sold on the domestic market rose by 3.0 %, while prices of exported products went up by 3.3 %. Prices of products exported to euro area countries grew by 3.8 %, whereas prices of products exported to non-euro area countries rose by 2.9 %.

MEP: an even greater UGF dominance would slow down Latvia’s development

If the Union of Greens and Farmers (UGF) gains an even greater presence in the upcoming Saeima elections, Latvia’s continued development would suffer, said member of the European Parliament Artis Pabriks in an interview to 900 seconds programme of LNT.

Tax reform challenge in January: labour tax recalculation

2018 commenced for Latvia with a historical tax reform and conceptual changes, significantly affecting everyday work performed by businessmen, employers and accountants. One of the changes financial specialists have to remember when calculating wages for January is the one for personal income tax, which also includes changes for state social insurance fees and solidarity tax, BNN was told by accounting experts.

Total tax debts in Latvia reach 1.217 billion euros at beginning of 2018

At the beginning of the year, total tax debts in Latvia, including existing debts, halted debts and debts with extended repayment debts, reached EUR 1.217 billion, which is 3% less when compared with the previous month, as reported by the State Revenue Service.

Estonia emphasises animal welfare as demand for animal food products grows

Although the demand for food products from animals is increasing, attention should be paid both animal welfare and sustainability in agriculture, Estonia's Minister for Rural Affairs Tarmo Tamm has stated.

Latvia hopes to recover its status as a country free of swine fever

There is hope that Latvia may yet recover its status of a country free of swine fever, says Food and Veterinary Service’s (FVS) Animal Infections Monitoring Department lead expert Mārtiņš Seržants.

Estonia prepares to inform population of actions in case of emergency or war

Estonia is preparing a brochure on how its population should act in case of major crisis or war.

De Facto: international lawsuit against Latvia is associated with infamous Winergy case

Norvik Bank’s lawsuit against Latvian state in the international court of arbitration in Washington is associated with Winergy wind park business, as reported by De Facto programme of LTV. The bank has yet to announce the amount of money it wishes to enforce from the state

German Social Democrats vote to U-turn on coalition talks with Merkel's conservatives

In Germany, where four months after its federal parliamentary elections there is still no government, the Social Democrats have voted to enter coalition talks with the conservatives led by German Chancellor Angela Merkel.

Weather in Latvia to become warmer this week; thaw to settle in

Weather in Latvia will be dictated by an anticyclone at the beginning of the week. Precipitation is only expected in some areas, mostly in the north. The sky will be cloudy for the most part. Still some sun is expected every now and then, as reported by State Environment, Geology and Meteorology Centre.

Turkey crosses into Syria to attack Kurdish militia

Turkey's ground forces have entered the territory of neighbouring Syria strengthening Ankara's offensive to push Kurdish militia, considered to be terrorists by Turkey, away from the border.

Week in Lithuania. Fake news on Lithuanian Defence Minister planted on news portal

The Tv3. lt news website was hacked on Thursday, January 18 - a fake news story about Lithuanian Defence Minister Raimundas Karoblis was posted claiming that Karoblis allegedly harassed Ridas Jasiulionis, a journalist at the Žinių Radijas radio station, and admitted being gay.

BNN summary of the week: final report on Oligarchs case and ordered attacks on e-health

BNN offers a summary of this week’s topical news in a variety of categories: Change; Fight; Attack; Growth; Decline; Opinion; and Study.

Economist: the most important reform has to happen in people’s heads

«Of all the clever things taught to us in school about psychology, one thing that has stuck with me over the years is the idea of internal/external control point. There are people who believe they make their own fate. There are also people who believe our fate depends on external powers. I suspect people in Latvia explain successes and failures with external factors much more than people in Switzerland or any other country that has enjoyed its freedom longer than Latvia,» comments Luminor Bank’s economist Pēteris Strautiņš.

Minister promises bigger wages for working people and support for country’s industry

«Latvian Economy Ministry’s priorities for 2018 include increasing wages for working people and providing support to the country’s industry. For Latvia’s centenary year, every resident should have the right to experience the increase of the personal and state welfare,» promises Economy Minister Arvils Ašeradens.

Latvenergo: electricity price has declined 30% in the past three years

Average electricity price in Latvia has declined in recent years. The average price of electricity has declined by 30% at Nord Pool exchange between 2014 and 2017, allowing end user costs to decline, says Latvenergo.

Would you be ready to boycott something in your life?

View Results

Loading ... Loading ...

Polls Archive

Category feed: Feed: