| 2009 govt budget has been hardest in past years - Latvian PM |
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| Wednesday,November 19,2008 Posted: 15:40 BJT(0740 GMT) |
| From:Baltic News Service Article type:Original |
RIGA, Nov 15, BNS - The 2009 government budget adopted by the Latvian parliament late on Friday has been the hardest budget in the past years, Prime Minister Ivars Godmanis told the press after the parliament meeting.
He said that such a hard budget has not been seen since 1995.
Godmanis said that the most important thing now is to successfully complete this year's budget. He said that the government has measures to be implemented for the budget to meet the target. He said that wage fund of state administration institutions will be cut by 5 percent and procurements by 3 percent.
The prime minister underscored that it is also important to follow next year's budget. "We can come up with amendments only in an extraordinary situation," he said.
The prime minister did not exclude that next year's gross domestic product (GDP) forecast for a drop of 1 percent might be too optimistic and the government might need to introduce amendments. He also said that at present the economy is at the stage of recession and slowdown of economic development is hard to forecast.
The Latvian parliament on Friday after six-hour debates adopted the 2009 budget in the final reading, envisaging a deficit of 1.5 percent of the gross domestic product (GDP).
The bill was adopted with 53 votes to 43.
Revenues to the government budget are projected at 5.32 billion lats (EUR 7.5 b) and expenditures at 5.57 billion lats, and the budget deficit is planned at 247 million lats or 1.5 percent of GDP. Revenues to next year's budget are expected to grow by 1.1 percent as compared to 2008, and expenditures by 6 percent.
2009 draft budget saw considerable changes between the first and second readings -- revenues to consolidated budget have been reduced by 145 million lats, and expenditures by 227.7 million lats, while the planned deficit to the consolidated budget has been cut by 82.5 million lats.
GDP forecast has also been amended in the process -- initially a GDP growth was projected by 2 percent, but at present it is planned that GDP will drop by 1 percent.
A total of 510 proposals had been submitted for the second reading of the bill.
When working at 2009 government budget and following the world's economic development trends, several significant measures to increase efficiency of state administration institutions have been carried out. The ministries had to cut their budgets by 10.67 percent of the adjusted expenditures planned for 2009 budget. Bu July next year the number of employees in state administration has to be cut by 10 percent, and wages have to be reduced by 5 percent.
The budget projects that the maximum government debt at the end of the year is 2.82 billion lats. The finance minister will be able to issue state guarantees worth 29.646 million lats. Increase of government budget lending can be 134 million lats, while increase of municipal loans is set at 107.5 million lats.
Revenues to this year's government budget are planned at 5.264 billion lats, while expenditures are expected to reach 5.256 billion lats, and the budget should have a surplus of 0.05 percent of GDP or eight million lats.
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