Dombrovskis: No big changes in economy next year

The European Commission (EC) predicts that there'll be no significant changes in the economy of Latvia, Vice-President of the EC Valdis Dombrovskis told Latvian Radio Monday morning. 

He said that the growth in Latvia's economy will be larger than on the average in Europe. The forecast for the Eurozone growth is at 2.8% next year, while it's expected to sit at 3% in Latvia.

However there's the possibility to shift taxes from workers - especially those with a low salary - to other tax bases that don't affect growth as much, such as capital, spending and property. However, this recommendation applies to all of the EU states, said Dombrovskis.

While on Latvian Television's Rīta Panorāma when talking about that entrepreneurs, organizations and even the Central Bank are dissatisfied with next year's budget, Dombrovskis said that "the budget is always a balance between possibilities and necessities," and of course that entrepreneurs would like the taxes to be as small as possible.

The Latvian government on September 29 approved the draft national budget for 2016 with a deficit at 1 percent of GDP. The government also approved a bill about the medium-term budget framework for 2016, 2017 and 2018. The budget was sent to the parliament on September 30.

The budget has been drafted setting that priorities next year are the country's external and internal security, health care services and education. Allocations for defense will amount to 1.4 percent of GDP in 2016, 1.7 percent of GDP in 2017, and 2 percent of GDP in 2018.

The economic growth in 2016 is forecast at 3 percent of GDP, while in 2017 and 2018 it is expected to reach 3.6 percent. Budget  deficit is planned at 1 percent of GDP in 2016 and 2017, and 0.8 percent in 2018.

If all goes as planned, the minimum wage in Latvia will be raised €10 to reach €370 next year, while the non-taxable minimum will reach €85 up from €75 and 32,000 retired people will see their pensions grow by €10. 

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Related articles
Economy
Economy