Stronger economic growth required says President

Latvia's economic growth is not strong enough for the general population to feel the benefits, President Raimonds Vējonis said Wednesday after a meeting with Latvian Central Bank governor Ilmars Rimsevics.

"Achieving a higher standard of living requires faster economic growth. In order to be able to afford growing government spending, revenues need to be increased significantly, but so far the economic growth rate is not enough to provide them," Vējonis said after the meeting.

In the President's view bigger budgetary revenues could be achieved by enhancing export volume growth and continuing to encourage Latvian entrepreneurs to diversify into new markets.

Vējonis also urged greater efforts to tackle Latvia's shadow economy, which is generally believed to account for around a quarter of total GDP.

"According to local researchers estimates the unofficial economy in Latvia accounts for about a quarter of gross domestic product. Avoidance of value added tax owed to the state every year causing losses of more than €700 million - equal to the entire health sector budget. The situation is dramatic, it should be addressed immediately," stressed the President.

Rimšēvičs - a well-known advocate of not tinkering with taxes for years at a stretch - presented the latest economic development trends and the biggest challenges, the Presidential press service reported.

A slowdown in the economy at the end of 2015 "forces us to continue to take particular account of realistic budgeting, prudent and predictable fiscal policy as well as the need to improve the Latvian economy's competitiveness through structural reforms," ​​said Rimšēvičs.

He did not specify exactly what form those "structural reforms" - popular buzzwords among policymakers - should take.

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