Considering the slowing of the economy and possible failure to achieve the tax revenue plan, the government cannot afford to take on new, additional expenses, said Minister of Finance Arvils Ašeradens in an interview to TV3 programme 900 seconds on Thursday, the 11th of April.
The minister said the situation in the economy changes very rapidly. For example, while in August 2023 the Ministry of Finance predicted 2.4% growth for Latvia’s economy in 2024, the new outlook suggests growth will not exceed 1.4%. Inflation in Latvia is also significantly lower than previous forecasts suggested.
“There is a new reality,” said Ašeradens, adding that in this situation it is not difficult to predict that tax revenue will be below expectation.
The minister said he plans to inform the government about the situation in the second half of April. Looking at the situation now, however, there are few good news.
“What I can recommend to the government now, is to not, under any circumstances, take on new, additional expenses. I would recommend doing the opposite – reviewing the government’s expenditures,” said Ašeradens.
He also mentioned that the topic of the possible reviewing of the government’s expenditures could be discussed in the second half of April, as the situation is currently being reviewed. This includes looking at various alternatives.
LETA previously reported that tax revenue in the first two months of 2024 reached EUR 2.389 billion, which is EUR 40.5 million or 1.7% less than planned.
In the general budget, tax revenues in the first two months of this year amounted to EUR 2.257 billion, which is EUR 34.5 million or 1.5% less than planned. In the state budget, tax revenue amounted to EUR 1.82 billion, which is EUR 63.5 million or 3.4% less than planned, but tax revenue in the municipal budget amounted to EUR 436.9 million, which is EUR 29 million or 7.1% more than planned.
Also read: Minister of Justice to serve as acting Latvian PM during Siliņa’s visit to Austria
Follow us on Facebook and X!