Parliament passes record 2006 budget

  • 2005-10-26
  • From wire reports
RIGA - Latvia's Parliament adopted the 2006 state budget on Oct. 20, asking for very few changes to the draft that the Cabinet originally proposed. The budget was adopted with 75 votes for and 11 against and 10 abstaining. The budget forecasts a deficit of 1.5 percent of GDP, or 145.2 million lats. Revenues are projected at 3.2 billion lats (4.5 billion euros), representing the country's largest budget yet.

Inflation is forecast at 4.5 percent, but there is widespread doubt that with a booming economy 's growth is pegged at 7.5 percent next year 's that the government will be able to meet this indicator.

Prime Minister Aigars Kalvitis told journalists that the budget had been extremely difficult to put together given the country's extensive social needs. However, a majority of lawmakers backed the budget straight away.

Finance Minister Oskars Spurdzins also expressed satisfaction, saying that the initial document had not changed significantly. He stressed that the government would have to work hard to implement the budget since it envisaged record-high revenues.

The draft budget provides for allocating 296.7 million lats for various priorities. Some 40 million lats have been earmarked for raising teachers' salaries, 12 million for increasing police officers' salaries, 40 million for the implementation of NATO requirements and 31.1 million for health care.

Under the draft budget municipalities will receive 75 percent of personal income tax revenues instead of the previous 73 percent, while the state will get 25 percent instead of previous 27 percent.