Fiscal Discipline Council (hereinafter - the Council) is an independent collegial body established to monitor the compliance with the rules of the fiscal discipline.
The Council has the responsibility for the following:
- monitor the compliance with the Fiscal Discipline Law (hereinafter - FDL) provisions in the budget framework law and the annual state budget law during their preparation, execution, and amendment;
- verify, if the fiscal balance and the expenditure growth provisions have been properly applied, including an independent assessment of the potential GDP and nominal GDP, and the calculation of the structural balance;
- monitor the compliance with the FDL conditions with the estimated summary fiscal indicators during the execution of the annual state budget law, the consolidated local government budget, and derived public person budgets;
- prepare opinion regarding the major departures from the balance condition permitted during a severe economic downturn;
- prepare an opinion on the fiscal safety reserve to counter the prevailing fiscal risks for the state;
- prepare a monitoring report for fiscal discipline and, if necessary, an irregularity report;
- prepare and submit to the Saeima and the Cabinet of Ministers opinions regarding issues of fiscal policy and macro-economic development, as necessary to ensure the compliance with the FDL;
- prepare the reports stipulated by FDL to assess and analyze the fiscal policy sustainability of the country.
Last modified : 20 November 2014
Fiscal Council will not approve next year budget without fiscal safety reserve. Interview with the Fiscal Council chairman Jānis Platais. More information available in Latvian at financenet.lv portal.
The Fiscal discipline council endorses the Ministry of Finance macroeconomic projections, particularly real and nominal GDP growth, potential GDP growth and output gap, inflation and GDP deflator, for 2017-2019.
The Council provides an opinion on the macroeconomic forecast.
The Government’s declaration includes a plan to increase tax revenues by 2020, primarily by limiting the shadow economy. Both studies and the publications of international organisations indicate that Latvia’s shadow economy is above average levels in the European Union. One of the factors that influences the size of the shadow economy is people’s attitude towards taxes and paying taxes. In cooperation with the social research centre Latvijas fakti a survey was conducted in order to ascertain people’s views on the abovementioned topics.
On 10 June 2016, the Fiscal Discipline Council endorsed the Ministry of Finance’s macroeconomic projections that will be used as the basis for drafting Latvia’s medium term budget framework 2017-2019. Early review and endorsement of the MoF’s macroeconomic projections by the Council has been agreed to support the effort in the Government in preparation of annual documents - the stability program and the medium-term budget framework.
Today during the Fiscal Discipline Council meeting, the macroeconomic trends and forecasts for the coming years were discussed with the Ministry of Finance representatives.