Bank of Latvia President: we need feasible 2011 budget
Bank of Latvia President Ilmars Rimsevics
Latvia needs realizable and stable 2011 state budget, in order to regain investment grade credit rating, the Bank of Latvia (BL) President Ilmars Rimsevics (Ilmārs Rimšēvičs) said in an interview with the financial newspaper Bloomberg.
«Latvia should approve a convincing, transparent and understandable budget without delays, so that the rest of the world sees what we have managed,» says BL Head.
After Latvia turned to international lenders, Standard & Poor’s and Fitch Ratings cut Latvia’s credit ratings, although they rose them back to stable this year. Moody’s grades Latvia Baa3, which is the lowest investment grade rating with a stable future prospect, reports LETA.
Rimsevics explained the government has to cut 395-440 million lats to reduce the next year’s budget deficit. The goal is to conclude 2011 with 6% of GDP, while this year – with about 9% of GDP.
BL President believes the aim to introduce the euro in 2014 is feasible, if the planned budget deficit of 2011 is implemented.
«Latvia needs to continue with the structural reforms, reconsidering and reevaluating all the functions and expenditures. This would be the right way where to look for additional resources, not the easiest way that would be tax rise, that way decreasing the Latvian goods and services competitiveness,» points out Rimsevics.
Despite BL forecasts Latvian economy downturn of 1% this year, Rimsevics indicates the result might as well turn out to be better or even return to growth.
«Latvia’s economy has regained most of its competitiveness lost in the previous years. Economy recovery is ongoing much faster than expected,» says BL President
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