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Latvian Fiscal Discipline Council criticizes plan about putting off creation of fiscal security reserve

BC, Riga, 26.05.2016.Print version
The suggestions to wait with creation of the fiscal security reserve will bring Latvia closer to a new crisis, the Fiscal Discipline Council warned, cites LETA.

"Without proper consideration of economic and geopolitical risks, we are merrily paving a road to a new crisis,” Janis Platais, the head of the Fiscal Discipline Council, said in a statement to the press.

 

He said that suggestions had been made in the political backstage not to create the fiscal security reserve in 2017 in order to increase current expenditure in the Latvian budget.

 

"In 2016 the government already sacrificed the fiscal security reserve on the altar of defense expenditure. In 2017, more sectors will seek the increase of the deficit by reducing the reserve necessary for development. Will we remember those, who now call for stepping on the gas, when we will have to decide which taxes to increase and which expenditure to slash in order to compensate for the lack of fiscal discipline in the years of growth?,” Platais said.

 

He pointed out that the Latvian GDP was still below the pre-crisis level which was EUR 22.6 billion in 2007. The Finance Ministry estimate for GDP in 2016 is EUR 22.1 billion based on constant prices in 2010.






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