According to the latest forecasts of the Bank of Latvia, the national economy is in stagnation, and future growth does not promise to be rapid either. Next year’s budget includes large additional investments in defense (and no one doubts their necessity), but politicians have no plan to earn more to be able to pay teachers, doctors, and internal affairs workers, says the “Nothing personal” campaign.
Politicians have no plan to earn more
According to the latest forecasts of the Bank of Latvia, the national economy is in stagnation, and future growth does not promise to be rapid either. Next year’s budget includes large additional defense investments (and no one doubts their necessity), but politicians have no plan to earn more to pay teachers, doctors, and internal affairs workers.
According to experts, the next budget is extremely strained, both the deficit and the national debt have increased. But the Government, which has been in office for three months, has not initiated bold changes that can stimulate development.
Since there is no such real economic policy, important decisions for all are often dictated by the lobby of certain industries. The Saeima’s commitment to defend borrowers faced opposition from banks this autumn. On the other hand, part of the woodworkers can expect a response from the government next week.
The latest forecasts show that Latvia’s economy has two years of weak growth ahead. Bold decisions should be made in order to improve the economy’s temperature. However, next is the redistributive and spending budget.
This year, the size of the economy grew by a barely perceptible 0.4% percent, which is half of what was predicted back in the summer. This year’s inflation estimate is 9%. It is expected to be much lower next year, but GDP growth will also remain weak. Such development is determined by the fact that Latvia is an exporting country, and its prosperity is dictated by the situation in the main export markets. The global geopolitical situation and the deterioration of consumer sentiment do not lead to optimism either.
AGNES FLOWER
Economist of the Bank of Latvia
If we are talking about the next year, then I have to use such epithets as sluggish growth, starving, languishing and the like. At least the first half of the year does not promise anything so encouraging.
Slow progress in the second half of next year will be possible. However, the President’s determination to achieve the average standard of living in Europe by 2030 cannot be discussed with such numbers. , (credits: inflation 2% in 2024; GDP – 2% 2024)
VIKTOR VALAINIS
Minister of Economy (ZZS)
Our task is to beat the forecasts of both the Bank of Latvia and the Ministry of Finance for economic growth. The question is how to successfully invest its support programs, and for Latvia they are more than 1 billion European structural fund financing planned for economic growth. 00.43
The economist of the Bank of Latvia emphasizes that in terms of investments, we have been lagging far behind the two Baltic neighboring countries for ten years. But the politicians still don’t have a plan for how to take our neighbors by the hand. The impressive European money is the only tool with which Latvia develops its economic interests, but there is a risk of not being able to finish several dozen of the projects worth more than 400 million already in the current fund planning period, reports VARAM ministry.
Economists, looking at the next year, generally do not see that significant steps have been taken to earn more.
AGNES FLOWER
Economist of the Bank of Latvia
So far, I do not see such real incentives in this budget package
What I would very much like to see among these priority directions here would be a more meaningful use of EU funds.
Be sure to think about export, innovation and investment in science, because that investment channel is the one that would ensure this more serious growth, otherwise the helicopter money will definitely not help.
Experts emphasize that the investment climate is important. There are no new companies that can pay high wages.
Evikas Silina’s government declaration promises to improve the competitiveness of the economy, reduce bureaucratic obstacles, increase tax revenues, and simplify tax payment.
VIKTOR VALAINIS
Minister of Economy (ZZS)
NP: None of this has already been visibly (done)?
All these jobs are listed and we will deal with them one by one.
There will be no changes in payroll taxes, which are important for employers to equalize labor costs with Estonia and Lithuania. According to the Minister of Finance, when the economy is at its lowest point, it is not right to change taxes. Small business is also not expected to improve next year. The economic activity revenue account, which cost the Ministry of Finance 800,000, is used by only slightly more than 100 million micro-enterprise taxpayers. Only one bank offers this service, it is not attractive to the others.
On the other hand, the opposition’s proposal to reduce the micro-enterprise tax for artisans and creative people next year, when the Saeima was reviewing the budget, did not receive support.
When it comes to economic development, one cannot ignore the ever-increasing size of the shadow economy. The state budget loses more than 2 billion euros annually.
ARVILL ASHERADEN
Minister of Finance (New Unity)
The shadow economy is a phantom. That way you don’t get to see or measure him.
What I see is that SRS has improved work with VAT schemes.
We don’t see such mega problems there.
Envelope wages are still a present phenomenon.
Although politicians say they are looking for ways to encourage citizens to come out of the gray zone, the experts’ recommendations for a “Plan to Curb the Shadow Economy” for the next three years have not been included.
2023-12-17 18:09:40
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