The President of Latvia expressed his view that greater budget revenue in Latvia could be achieved by enhancing the growth of export volume and continuing export market diversification and search for new markets so successfully started by Latvian businesses. By creating a portfolio of strategic and competitive investment projects, better results could be expected in attracting investments with local and foreign investment being attracted to Latvian market.
R. Vējonis mentioned the implementation of planned measures to reduce the share of shadow economy in Latvia as a mandatory and urgent task. “According to estimates of local researchers, the amount of shadow economy makes about a quarter of gross domestic product in Latvia. Evasion from value added tax causes the losses of more than 700 million euro to the state, which equates to the annual budget of healthcare sector. The situation is dramatic, thus it should be addressed immediately,” stressed the President of Latvia.
I. Rimšēvičs reported the trends in economic development of Latvia and the biggest challenges to the President of Latvia by stressing that significant improvements were required in areas like healthcare, education, and business and legal environment.
I. Rimšēvičs informed that Latvia’s economy retarded at the end of 2015, thus demonstrating high level of uncertainty and risks caused by external factors, including global economic developments, slow growth rate of the Eurozone, the economic crisis in Russia and significant depreciation of rouble. “It makes us continue paying particular attention to sound budgeting, prudent and predictable fiscal policy, and improvement of competitiveness of Latvian economy through structural reforms,” emphasized President of the Bank of Latvia.
During the meeting, the officials also discussed assessment of baseline expenditure of the state budget. R. Vējonis pointed out that continuing and completing assessment baseline expenditure of the state budget was essential in order to ensure more efficient, national priorities and objectives appropriate the state budget spending that would be more understandable to the public.