Budget, Financial Services, GDP, Latvia, Legislation

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 10:21

Budget amendments stipulate that budget deficit in Latvia will reach 9.2% of GDP in 2009

Nina Kolyako, BC, Riga, 01.06.2009.Print version
The bill on amendments to the state budget envisages that consolidated budget deficit this year will reach 9.2 percent of gross domestic product, including an 8.2 percent deficit in the central government budget and a 1 percent deficit in the municipal budget, according to documents that the government is to review today.

The Finance Ministry informed LETA that, taking into consideration the current economic situation, the deficit in the municipal budget may exceed 1 percent, which is why the budget deficit projections may be altered yet while the amendments are being reviewed in the parliament.

 

Prime Minister Valdis Dombrovskis (New Era) told the ministers today that the current budget amendments will be forwarded to Saeima to be reviewed in the first reading, and new proposals will be drawn up for the review of the amendments in the second reading. The scale of these proposals will be coordinated with the international donors yet.

 

The bill of amendments informs that Latvia's gross domestic product is projected to contract 18 percent this year. The latest GDP forecast has been coordinated by the Finance Ministry with the Bank of Latvia and the Economy Ministry, and in consultations with private sector analysts and the International Monetary Fund.

 

During the work on the amendments, the government ordered a 20 percent reduction in the spending on salaries in the public sector, and a 40 percent reduction in all other planned budget expenditures, except for the due payments into the European Union budget, the Defense Ministry's payments to NATO and the United Nations, Foreign Ministry's program on payments to international organizations, expenditures on government debt, and others.

 

The ministries and other government institutions were ordered to prepare structural reforms and optimize their structure through mergers, reorganization or liquidation of a number of government institutions.

 

Taking into account that the budget amendments envisage steep spending cuts, the amendments must be passed immediately, so that the ministries and other government agencies know how much money they will be allotted from the budget this year, stressed the Finance Ministry.

 

It is planned that the Defense Ministry's budget will be reduced LVL 30.8 million, the budget of the Finance Ministry will be cut LVL 14 million, Interior Ministry – LVL 10.4 million, Education and Science Ministry – LVL 22.1 million, Agriculture Ministry – LVL 20.5 million, Transport Ministry – LVL 109.5 million, Welfare Ministry – LVL 7.2 million, Justice Ministry – LVL 7.4 million, Culture Ministry – LVL 15.9 million, Health Ministry – LVL 39.3 million, and Regional Development and Local Governments Ministry – LVL 10.8 million.






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