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No money for populist measures in Latvia's 2019 budget - finance minister

RIGA - No extra allocations will be planned in Latvia's 2019 national budget for any populist measures that may be proposed ahead of the general elections this fall.

"We can always find financing for important measures but there will be no money for the pre-election populist measures," Finance Minister Dana Reizniece-Ozola (Greens/Farmers), told LETA.

She said the 2019 budget was still being drafted and the ministries were revising their expenditures. It is too early to speak about the amount of financing that will be available for new priorities because it will depend also on Latvia's macroeconomic indicators, the minister said.

"At the moment it is hard to make any accurate forecast of revenue because the tax reform will take full effect in the middle of the year with the changes regarding corporate income tax," she said, stressing that it was clear that additional finances would have to be found within the existing resources without increasing the financial burden on tax payers.

As reported, the Finance Ministry said in the Stability Program 2018-2021, which has been submitted to the Cabinet of Ministers for adoption, that Latvia's fiscal space will be negative in 2019 and 2020. According to the current forecasts, the fiscal space is planned at minus EUR 45.2 million for 2019 and minus EUR 37.8 million for 2020, but a positive fiscal space of EUR 3.2 million is being projected for 2021.

However, the fiscal space may be adjusted in fall when the macroeconomic forecasts are updated and there will be information about the results of revision of expenditure at the Latvian ministries.

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