bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 22.10.2017 | Name days: Irīda, Īrisa
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

BNN summary of the week: birth and death rates in Latvia turn out shocking. Gambling halls to close down

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

Professor: by taking money away from science, the state shoots itself in the foot

The matter regarding insufficient funding for science has recently become more topical in the public space. President of Latvian Academy of Sciences Ojārs Spārītis is rather critical of the situation: Latvia has lied to the European Union and European Commission about making sure that funding for science reaches 1.5% of GDP by 2020.

To prevent fraud, audit of MPC recipients to be performed in Latvia

Latvian Economy Ministry intends to perform an audit of mandatory procurement component recipients and use new regulations to combat fraudulent activities, as confirmed by Economy Minister Arvils Ašeradens.

Rail Baltic procurements to be processed using Electronic Procurements System

Following the changes to Latvian Republic’s Public Procurements Law, all new procurements for Rail Baltica administered by RB RAIL will be processed using a free electronic information system and its e-contest subsystem.

Estonian construction price index pushed up by wages

The construction price index in Estonia has in July-September of 2017 increased by 0.9% in comparison to second quarter this year and by 1.7% from July-September of 2016, Estonian statisticians have estimated.

Surplus of Latvia’s government budget reached 9.5 million euros in 2016

In 2016 general government budget surplus accounted for EUR 9.5 million or 0.04 % of the Gross Domestic Product, whereas general government consolidated gross debt amounted to EUR 10 091.6 million or 40.6 % of the GDP.

Latvia to invest EUR 5.9 million into formation of unified port network

Ports of Riga planning region and Kurzeme planning region have commenced an important tourism project. The goal of this project is creating a unified yacht port network in Latvia and Estonia with quality services that would allow developing sailing tourism and attract foreign sailing enthusiasts in the future, reports the regions’ representative Inese Ozoliņa.

Graft-suspected Tartu deputy mayors resign

In Estonia's second largest city, Tartu, Deputy Mayors Artjom Suvorov and Valvo Semilarski have stepped down from office, Estonian press reported, after the politicians were arrested under suspicion of graft.

Expert: workers of Latvia’s NGO sector have high ‘burnout’ risk

Workers of Latvia’s NGO sector have a high burnout risk, said once the director of Providus Dace Akule in an interview to Latvijas Radio.

Producer: many young people come to work in the film industry

Latvia’s film industry has been steadily growing these past several years, and it is especially gratifying that many young people are coming to work in the industry, says director and producer, representative of Film Angels Productions Jānis Kalējs.

Pollution blamed for every sixth premature death globally

Nine million premature deaths globally in 2015 are said to be related to pollution, a study has found pointing to presence of harmful matter in air, water and workplace as the three main risk factors.

Infectologist: influenza kills biologically the weakest, including children and pregnant women

Influenza is an infection that affects both children and adults. However, it kills those who are biologically weak, says Immunization State Council chairperson and infectologist of Children’s Vaccination Centre Dace Zavadska.

Investor activity made easier between Latvia and Vietnam

An intergovernmental agreement has been signed between the Republic of Latvia and Socialist Republic of Vietnam on prevention of double taxation and tax avoidance in relation to income tax.

Colder masses of air to enter Latvia in coming days; precipitation to be limited

Although high atmospheric pressure will be present above Latvia in the coming days, southern regions in Latvia will experience short-term precipitation on Saturday, 12 October, caused by the cyclone active above Poland. Colder masses of air will enter Latvia in the coming days.

Maltese journalist said to be killed by remotely-controlled explosive

Officials in Malta have unveiled it is assumed that investigative journalist Daphne Caruana Galizia was murdered by an explosive places under her car, which was detonated remotely.

Prime Minister: Latvia cannot accept additional asylum seekers

Latvia cannot afford to resettle additional asylum seekers, said Prime Minister Māris Kučinskis during his meeting with European Commission President Jean-Claude Juncker on Thursday, 19 October.

Scandinavians purchase tourism company in Lithuania; changes expected in Latvia too

Dutch Otravo online travel organization has expanded and has purchased Lithuanian online travel agency Interno Partneris, thereby entering the Baltic market.

Ombudsman: non-citizen status matter should be resolved in next decade

The next ten years may be the transition period to ‘put an end’ to the non-citizen status in Latvia, said ombudsman Juris Jansons in an interview to LTV programme Rīta panorama.

Swedish Foreign Minister: harassment exists at highest political level

The Foreign Affairs Minister of Sweden, Margot Wallström, has commended the current sexual assault and harassment awareness campaign in social media and urged to fellow politicians to address the problem.

Latvenergo recognized as Latvia’s most valuable company for tenth time

Latvenergo has been recognized as Latvia’s most valuable company in 2017. Its value grew 34% in comparison with 2016, according to the TOP 101 list of Latvia’s most valuable companies compiled by Prudentia and Nasdaq Riga.

Number of births and number of deaths decline in Latvia

During the first nine months of this year 15,723 babies were born in Latvia, which is 1,113 children fewer than in the corresponding period of the last year.

CC applies binding conditions for the sale of MTG Broadcasting AB

Latvian Competition Council has decided to permit Bite Lietuva to purchase MTG Broadcasting AB group’s businesses in Latvia. CC has applied several binding conditions to prevent a possible impact on competition on the television services and advertisement market.

Eesti Energia warns: Limiting CO2 emissions on capacity could endanger energy supply

Estonian energy giant Eesti Energia has evaluated that a plan under discussion in the European Union to introduce a carbon dioxide release limit for capacity mechanisms to qualify for subsidies could adversely affect the security of supply in Estonia and the Baltic states.

Solidarity tax norm recognized as non-compliant with Latvia’s Constitution

On Thursday, 19 October, the Constitutional Court of the Republic of Latvia declared the Solidarity tax norm as non-compliant with the country’s Constitution.

Survey: Riga residents go to the doctor’s the most often

34% of residents undergo regular health checks, according to Mana Aptieka & Apotheka health index. In addition, women are twice as serious about health checks as men.