IMF approves Latvia loan

  • 2009-09-03
  • From wire reports
RIGA - The International Monetary Fund's (IMF) Executive Board on Aug. 27 agreed to increase Latvia's allowed deficit for this year's budget to 13 percent of GDP, reports LETA. The previous allowance was five percent of GDP.
Prime Minister Valdis Dombrovskis (New Era) has emphasized that the deficit this year will not exceed 10 percent of GDP.

The Executive Board also approved the Latvian government's latest economic stabilization plan, agreeing to release the next loan, its second, of approximately 200 million euros. Approximately 150 million euros will be used against the budget deficit and refinancing government debt, with 50 million euros for stabilization of the banking sector.

Finance Minister Einars Repse (NE) said, "With this decision, international partners have recognized that the Latvian government has been working in the right direction preparing amendments to the 2009 budget, slashing unnecessary expenditures and implementing reforms to the public sector."
Latvia received the first IMF tranche, 590 million euros, last December. It has received two loans from the European Commission, a 1 billion euro portion this February followed by a 1.2 billion euro delivery in July.