Fiscal Discipline Council: public debt must go down

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Given that state aid to mitigate the COVID-19 crisis has already reached 9% of gross domestic product (GDP), the Fiscal Discipline Council (FDP) has repeatedly called on the government to limit new economic stimulus measures and to start thinking about a gradual reduction in public debt, FDP said in a statement August 12. 

The FDP said in a statement to the media that in July 2020,  general budget tax revenues were more than in July 2019. The special budget also fills up relatively well.

Consequently, it is likely that Latvia is already over the lowest point of tax revenue compared to the previous year.

Operational data from the State Treasury show that public debt has grown by about two billion euro since the announcement of the emergency in March. Given the positive trends in economic indicators and taxes, the FDP is calling on the government to start thinking about a gradual reduction in public debt.

The Council also stated in that it is necessary to establish more effective monitoring of the granting of State aid.

State development financial institution Altum currently has a high level of financial responsibility and therefore, for good management and prevention of financial risks, information on aid instruments granted to Altum and approved projects should be publicly available. It is also desirable to plan timely audits of aid measures and expenditure, said the FDP.

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