Finance Minister: Public debt to reduce in 4-5 years in Latvia

After the COVID-19 crisis, the public debt could increase to 52% from the GDP, and it is planned to decrease it over 4-5 years, said Finance Minister Jānis Reirs (New Unity) to Latvian Radio on June 15.

The Maastricht criteria has set the public debt ceiling for euro Member States at 60% of GDP. Currently borrowing to support economy, it is predicted that public debt will increase to 52%.

Over the next 4 - 5 years, it is planned to decrease it to 40%-45% so that the next generation of politicians are able to borrow in the event of a crisis, said Reirs.

He said that spending was not dramatically decreased during crisis, and it helped not to cut budget revenues, which are now "better than expected".

The aid is intended to bring economic growth back over 2 - 3 years with a balanced budget, and as economy grows, public debt will also be reduced.

Reirs denied concerns that public debt could impend the ability to borrow and said it is not planned to revise the budget and reduce spending.

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