From October 3 till 11, the technical mission of international lenders (International Monetary Fund, European Commission) visited Latvia to prepare for the last review mission which is scheduled for October 26 till November 7. The mission met government representatives and experts of the line ministries.
Representatives of the technical mission of international lenders gave a broadly positive assessment of economic indicators achieved as a result of fiscal consolidation after budget amendments, as well as expressed affirmative future forecasts for the Latvia’s economic development.
While doing its preparatory work the technical mission discussed with government representatives and experts of line ministries the medium-term macroeconomic development forecasts and trends for 2012, preparation of the next year’s budget, as well as other important issues like this year’s budget execution and progress on the Fiscal Discipline Law.
It should be noted that this mission is not expected to make any particular decisions. Decisions on the issues that are the most important for Latvia will be discussed during the review mission at the end of October and beginning of November. The most important task for the review mission of international lenders will be to agree on the state budget for 2012 and potential amount of fiscal consolidation as appropriate, as well as to persuade representatives of the IMF and EC about sustainability of the Latvian economic growth, i.a. efficiency of combating the shadow economy and the need to take into account resulting positive effects of economic recovery while drafting the state budget.
As usual by the end of the Review mission a Letter of Intent to the International Monetary Fund and Memorandum of Understanding with the European Commission will be signed.
The society will be informed about the decisions made during the review mission.
The Ministry of Finance reiterates that according to the agreement with international partners the international loan programme will be closed on December 22, 2011.
About the international loan:
The international loan programme for Latvia was planned in amount of 7.5 billion euro. In the view of facts that the economic and financial situation in the state has improved, Latvia does not need to utilise the full amount of the loan. By now Latvia has used 4.4 billion euro.
Latvia is going to repay the received funding by refinancing the government debt on the international financial market. In June 2011 Latvia returned successfully to international financial markets by issuing bonds worth 500 million USD. This emission proved Latvia’s ability to finance budget needs on its own and put safe basis for successful refinancing of loans in coming years on public financial and capital markets. In the future it is also planned to organize annual emissions of public national debt securities and diversify the investor base as a priority (in Europe, USA and Asia).
Additional information about the international loan is available on the website of the Ministry of Finance: http://www.fm.gov.lv/?lat/finansu_ministrija/jautajumi_un_atbildes/
Information prepared by:
Head of Communication Division
Phone 67083850, Aleksis.Jarockis@fm.gov.lv