Fiscal council: public debt continues to grow  21 April 2017

Despite the annual growth rate of Latvia’s economy reaching an average of 3.3% between 2011 and 2016, public debt has increased by 1.37 billion euro (1.09 billion was used to finance the general government deficit). This corresponds to a per capita increase of 921 euro (from 4 178 to 5 098 euro) and per employed person increase of 1331 euro (from 10 310 to 11 641 euro).

Today the Central Statistical Bureau published the most recent information on the execution of the 2016 budget and public debt. According to the European System of Accounts, in 2016 the budget was balanced. However, according to cash flow, there will be a slight budget deficit (101.7 million euro according to the information we have received). The main cause behind the good result is the slow implementation of EU projects that delayed expenditures both at state and municipal level. A successful refinancing of public debt was carried out in 2016, but the overall conclusion is that increasing public debt when the economy is developing in line with its potential is not fiscally prudent, says Jānis Platais, the Chairman of the Fiscal Discipline Council.