Fiscal Balance in Latvia

Latvia Fiscal Balance | Economic News & Forecasts

Latvia - Fiscal Balance

Latvia reduces fiscal deficit ahead of EU-IMF schedule

On 8 June, the European Commission (EC) and the International Monetary Fund (IMF) approved the next loan program agreement with Latvia. This was part of the bailout the country secured two years ago, which allows the country to borrow up to EUR 100 million (USD 146 million). However, owing to the better-than-expected financial and fiscal position, the government decided not to borrow the agreed amount. In fact, in the fourth review under the Stand-by Arrangement, the IMF praised the government's strong spending discipline, which reduced the fiscal deficit to 7.7% of GDP in 2010, well below the 8.5% of GDP target. In addition, authorities anticipate that, on the back of the strong austerity measures adopted by the government in its December budget, this year's fiscal deficit will shrink below 4.5% of GDP. The unused funds are to be transferred to the next tranche, which will be released before the assistance expires on 19 January of 2012. Meanwhile, on 6 June, credit agency Moody's upgraded Latvia's credit outlook from stable to positive, citing the country's ongoing recovery, the consolidation of its public finances, as well as its progress towards meeting the criteria necessary in order to join the euro area.

Latvia - Fiscal Balance Data

2015   2016   2017   2018   2019  
Fiscal Balance (% of GDP)-1.4  0.2  -0.8  -0.8  -0.2  

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Latvia Facts

Value Change Date
Bond Yield0.550.0 %Jun 30
Exchange Rate1.120.65 %Dec 31

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