Budget, Financial Services, Latvia, Legislation

Valdis Dombrovskis.

The 2012 budget, with deficit planned at 2.5 percent of gross domestic product, will make it possible for Latvia to meet the Maastricht criteria, complete the economic stabilization program and the international loan program, stressed Dombrovskis.

The cost of servicing Latvia's debts depends on how the international loan program is completed. The budget approved today will lay the foundation for further economic development, and it will be a signal to the international community that Latvia is able to observe financial discipline, explained the premier, writes LETA.

Dombrovskis stressed repeatedly that the budget was based on highly cautious economic growth and revenue projections. That is why Dombrovskis is convinced that the 2012 budget is the last one that provides for fiscal consolidation measures.

If, however, pessimistic development scenarios for Europe turn out to be right, the government has promised the international lenders that it would take action and revise the budget accordingly – which, however, is not being considered at this time.

As reported, Saeima passed the 2012 state budget in the final reading today. 56 MPs voted for the budget, 42 voted against.