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On Thursday, December 8, Prime Minister Valdis Dombrovskis praised the agreement reached between the European Commission (EC) and the International Monetary Fund (IMF) on the conclusion of the final review mission and the loan program.
The Prime Minister points out that Latvia approaches the conclusion of the international loan program and it will be a positive signal and proof for financial markets and potential investors. The Prime Minister emphasizes that the conclusion of the program will allow for improvement of Latvia’s credit rating, significantly reducing the expenditures related to government debt servicing and facilitating access to credits for our entrepreneurs and residents. The financial discipline should be established by law, said the Prime Minister.
The results of the review mission will be approved and the loan program will be concluded after the meeting of the Board of the IMF to be held on December 22, 2011.
The government has been implementing the budget consolidation since 2008 with a view to reduce the excessive budget deficit. During the period from 2008-2012, the consolidation measures with fiscal impact in the amount of 17% of GDP (LVL 2.3 billion) have been implemented, of which LVL 934.4 million or 7.2% of GDP - measures taken on the revenue side, while LVL 1.4 billion or approximately 10.6% of GDP - measures implemented on the expenditure side.
About the international loan:
The international loan to Latvia was planned in the amount of EUR 7.5million. In view of the fact that the economic and financial situation in the country has improved, Latvia does not need full amount of the loan funds available. So far EUR 4.4 billion has been used.
Latvia plans to pay off the funding by refinancing the government debt in the international financial market. In June 2011, Latvia successfully returned to international financial markets by issuing 10- year bonds at the value of USD 500 million. It is indicative of Latvia’s ability to independently finance budgetary needs and a sound foundation has been laid for successful refinancing of the loans in public financial and capital markets in the coming years. It is planned to organize annual public issuing of government debt securities also in the future, giving a priority to ensuring diversification of the investors’ base (Europe, the USA and Asia).
For supplementary information about the international loan please visit the website of the Ministry of Finance: http://www.fm.gov.lv/?lat/finansu_ministrija/jautajumi_un_atbildes/
Supplementary information:
Martiņš Panke
Press Secretary to the Prime Minister
Mob.phone: 67082865 / 26556965
E-mail: Martins.Panke@mk.gov.lv
Information prepared by:
Diana Germane
Consultant of the Communication Department
State Chancellery
Phone. +371 67082922
E-mail: diana.germane@mk.gov.lv
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