The Fiscal Discipline Council approved the Ministry of Finance's Latvian macroeconomic forecasts for 2020-2022, which are used as the basis for medium-term budget framework. Overall, the projections are realistic, but there are concerns about risks in the area of international trade and the reputation of the banking sector.

For better understanding of the cyclical changes in the economy, the Fiscal discipline council, like other European independent fiscal authorities, uses a visual to characterise the economic cycle - the so-called heatmap. This tool confirms that Latvian economy is still maintaining the potential of growth, but overall, the peak of growth in this cycle has been reached in 2018. Budgetary expenditure planning for the coming years must take into account the risks of a decline in economic performance.

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The Fiscal Discipline Council has prepared a non-compliance report finding violation of the Fiscal Discipline Act by the government's decision to reallocate 8.1 million euros in unspent funds in the 2019 budget.

The Council presented their view to Saeima on 2020 budget on 22 October, 2019. Presentation here.

Fiscal Discipline Council: The best use of seized proceeds is to reduce the government deficit

Fiscal Discipline Board: Government has to consider bigger safety cushion for stability in future.

On September 26, 2019, a meeting of the Fiscal Discipline Council was held to discuss issues of Latvian economy, which will be eleborated in Council's Annual Surveilance Report. It will be launched in the first half of October. Issues relating to the administrative functioning of the Secretariat were also discussed at the meeting.

The Fiscal Discipline Council (Council) generally commends the work of the Ministry of Finance in preparing the 2020 budget framework, which began in government on Tuesday. However, the impact of the tax reform remains substantial and the compensatory measures are inadequate. Therefore, the Council considers that, in line with the requirements of the Fiscal Discipline Law (FDL), next year's budget expenditure should be reduced by EUR 94 million in comparison to the draft budget presented. This opinion was presented to the Cabinet of Ministers on Tuesday by the Chairman of the Council, Janis Platais.

WG on Fiscal Risks 21 August 2019

FDC: government's decision to establish fiscal security reserve in amount of 0.1% of GDP in 2020 is sufficient.

 25 June 2019

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