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Finance Minister: Latvia’s economy may grow by more than 3% in next three years

Dana Reizniece-Ozola/flickr.com/Finance Ministery.
In the next three years Latvia’s economy will grow by more than 3% every year, predicts Latvian Finance Minister Dana Reizniece-Ozola.

«In 2018, the state budget will focus on improving healthcare. The Saeima has approved a law that puts healthcare at the top of budget priorities. Other important fields include the country’s internal and external security, as well as measures to improve the established demographic situation. The government has also prepared an appropriate budget for the current economic situation. It fits fiscal discipline requirements and ensures increased funding for priority sectors. It is well-balanced and will secure more rapid development for Latvia’s national economy when compared with other EU member states,» the minister comments.

She notes that to improve accessibility of healthcare services, for the first time the budget will exceed EUR 1 billion in 2017, 2018 and 2019.

EUR 126.8 million will be allocated to improve national security. This will make sure Latvia’s funding of defence reaches 2% of the country’s GDP.

«Finance Ministry predicts that Latvia’s GDP will grow 3.7% this year. It is expected that next year’s growth may turn out slower, because the influx of investments is not expected to match this year’s result. GDP growth will likely reach 3.4% in 2018 and stabilize at 3.2% in 2020,» says Reizniece-Ozola.

The medium-term budget provides for budget deficit of 1% in 2018, 0.9% in 2019 and 0.4% in 2020. The state budget will remain focused on ensuring sustainable economic growth and continued realization of a fiscally-responsible policy.


«The 2018 budget is reasonable. It will help us finish previously initiated reforms in healthcare, improve internal and external security, as well as provide necessary support for demographic matters. All this, along with funding from the EU, will improve growth of Latvia’s national economy,» admits the minister.


Reizniece-Ozola also notes that investments provided by EU funds as part of the 2017 Cohesion policy are actively used to realize different projects. The government has managed to approve all important documents for the national policy and Cohesion policy’s investment requirements at nearly 100% of the funding available to Latvia, which is EUR 4.4 billion.

«Until now, the investment progress has been considered successful and compliant with European Commission’s established financial goal for 2017. Investment contracts for 55% or EUR 2.4 billion from the total funding available for Latvia were signed in 2017. So far, significant results have been accomplished in projects whose total costs reach EUR 117 million: 55,335 unemployed people and 1,598 risk group youngsters have been provided with support; 1,041 workers of the judicial system have received training to raise qualifications; support has been provided to 638 businessmen; 567 recommendations have been provided to improve children’s behaviour; 301 jobs have been created in supported territories, and 237 km of roads, bridges and tunnels have been reconstructed,» the minister added.

She predicts that a more intensive influx of funding and results is expected to come in 2018 and following years. Results from investments in research are expected to come soon. Projects launched with financial assistance from EU funds include improving the country’s ICT sector and public services to assist with commercialization of innovative solutions. Investments to support businesses will help with creation of jobs, improve productivity and export capabilities, as well as residents’ quality of life.

«An understanding memorandum was signed at the end of 2017 on the introduction of Norway’s and European Economic Zone’s financial instruments in 2014-2021 with a total funding worth EUR 102.1 million. Investments are intended for research and education, improvement of innovations in the business environment, regional development, addressing environment and climate challenges, raising the capacity of internal affairs and correctional services and strengthening of civil society,» said Reizniece-Ozola.


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