Analytics, Budget, Financial Services, Latvia, Legislation

It is planned that Latvia's budget deficit in 2013 will not exceed 1.9% of GDP, and 1.1% in 2014, Agnese Belkevica from the Finance Ministry's Communication Department told LETA.

The new letter of intent on further measures for economic stabilization and growth was approved at the IMF Board of Governors meeting on May 25, said Belkevica.

The letter informs that the Latvian government will pursue strict fiscal policy – a bill on fiscal discipline and amendments to the Constitution will be submitted to the Saeima by end-November, and the 2012 budget bill will be supplemented with a non-binding medium-term budget bill.

The letter says that with the adoption and implementation of Parex banka restructuring plan, a strategy for the sale of Citadele banka and a strategy for restructuring of Latvian Mortgage and Land Bank, that part of the international loan for Latvia that was reserved to support Latvia's banking sector will be released and used for stabilization of the financial system.

The international loan program for Latvia will conclude at the end of this year, but agreement was reached with the international lenders previously that Latvia would not use the remaining loan amount available to it from the European Commission and the IMF, and this year Latvia will only accept the last part of the World Bank loan for the social sector in the amount of EUR 100 million.