Fiscal discipline is not first priority in situation of geopolitical turbulences - Steinbuka

  • 2022-08-04
  • LETA/TBT Staff

RIGA - In the current geopolitical situation, fiscal discipline is not the first priority, but it should not be forgotten completely, said Fiscal Discipline Council (FDP) chairwoman Inna Steinbuka in an interview with LETA.

"I hope Latvia will manage to overcome the economic difficulties and consequences from the war unleashed by Russia in Ukraine with the less possible loss to every family and the state budget. Of course, fiscal discipline is not the first priority during the geopolitical turbulences. Being the head of the FDP, I believe that at present fiscal discipline is just one of the priorities that should not be forgotten," said Steinbuka.

Steinbuka reminded that the council and the European Commission recommend Latvia to use budget economically and with determination, even though currently there are no formal restrictions for government expenses and budget deficit.

"We should remember that Latvia has managed to keep a considerably low government debt level and a good reputation in international financial markets that helps us borrow money on low interest rates," said Steinbuka, calling to keep up the good reputation also in the future.

"There is only one recipe - productivity, innovations and economic growth should be increased which will result in more tax revenue in the budget. In order to do that, massive investments in economy are needed. Foreign investors are not queueing up right now to invest in Latvia and the Baltic region though. EU funds and the Recovery and Resilience Facility now is almost the only source of investment which should be used as efficiently as possible," said Steinbuka.

She said that the good news is that Latvia's economic growth is projected higher than average in the EU - around 3.9 percent.