The Latvian government has made progress in improving its budget deficit faster than expected, but further fiscal consolidation is still needed. While tax revenues decreased as a percentage of GDP despite tax increases, the tax burden has also distorted the economy and reduced motivation to pay taxes due to unpredictable changes. Expenditure cuts have accounted for a decreasing share of fiscal consolidation compared to tax increases. Additional measures are required to strengthen fiscal discipline, budget planning, tax administration and the balance of Latvia's tax system.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
The revenue and expenditure of india,fiscal policyHuma Ansari
• Revenue – sources of revenue
• Tax revenue and non tax revenue
• Union budget analysis
• Expenditure of government
• Need, types, objectives of government expenditure
• What is fiscal policy
• Concept and types of fiscal policy
• Different measures to control fiscal deficit
For its baseline budget projections, CBO estimates the revenue effects of enacted legislation that changed the amount of funding for tax enforcement. Similarly, CBO’s annual analysis of the President’s budget includes its estimates of the revenue effects of the Administration’s proposals to change such funding. (But CBO does not estimate the changes in revenue from proposals to amend the tax code; those estimates are the responsibility of the staff of the Joint Committee on Taxation.)
However, for legislation being considered by the Congress, CBO does not include projections of additional receipts from proposed increases in funding for tax enforcement in its estimates of the budgetary effects that are used for budget enforcement purposes. That approach follows the budget scorekeeping guidelines specified in the conference report for the Balanced Budget Act of 1997.
These slides describe the circumstances under which CBO estimates the revenue effects of changes in funding for tax enforcement and the factors that affect those estimates. They were the basis for a presentation by Janet Holtzblatt, a unit chief in CBO's Tax Analysis Division, at the sixth annual Internal Revenue Service-Tax Policy Center Joint Research Conference on Tax Administration.
Presentation by Presentation by Keith Hall, CBO Director, at the Robert H. Smith School of Business, University of Maryland.
Since 1975, CBO has produced nonpartisan analyses of budgetary and economic issues to support the Congressional budget process. Each year, the agency’s economists and budget analysts produce dozens of reports and hundreds of cost estimates for proposed legislation.
One such report is the annual Budget and Economic Outlook, which is generally released each January and updated in August, and projects economic and budget outcomes under the assumption that current laws regarding federal spending and revenues generally remain in place. Those baseline projections cover the 10-year period used in the Congressional budget process. This presentation includes some key elements of those projections.
To show how transportation funding is handled in CBO's cost estimates, this slide deck provides a guide to the agency's 2012 estimate of the Moving Ahead for Progress in the 21st Century Act.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
The revenue and expenditure of india,fiscal policyHuma Ansari
• Revenue – sources of revenue
• Tax revenue and non tax revenue
• Union budget analysis
• Expenditure of government
• Need, types, objectives of government expenditure
• What is fiscal policy
• Concept and types of fiscal policy
• Different measures to control fiscal deficit
For its baseline budget projections, CBO estimates the revenue effects of enacted legislation that changed the amount of funding for tax enforcement. Similarly, CBO’s annual analysis of the President’s budget includes its estimates of the revenue effects of the Administration’s proposals to change such funding. (But CBO does not estimate the changes in revenue from proposals to amend the tax code; those estimates are the responsibility of the staff of the Joint Committee on Taxation.)
However, for legislation being considered by the Congress, CBO does not include projections of additional receipts from proposed increases in funding for tax enforcement in its estimates of the budgetary effects that are used for budget enforcement purposes. That approach follows the budget scorekeeping guidelines specified in the conference report for the Balanced Budget Act of 1997.
These slides describe the circumstances under which CBO estimates the revenue effects of changes in funding for tax enforcement and the factors that affect those estimates. They were the basis for a presentation by Janet Holtzblatt, a unit chief in CBO's Tax Analysis Division, at the sixth annual Internal Revenue Service-Tax Policy Center Joint Research Conference on Tax Administration.
Presentation by Presentation by Keith Hall, CBO Director, at the Robert H. Smith School of Business, University of Maryland.
Since 1975, CBO has produced nonpartisan analyses of budgetary and economic issues to support the Congressional budget process. Each year, the agency’s economists and budget analysts produce dozens of reports and hundreds of cost estimates for proposed legislation.
One such report is the annual Budget and Economic Outlook, which is generally released each January and updated in August, and projects economic and budget outcomes under the assumption that current laws regarding federal spending and revenues generally remain in place. Those baseline projections cover the 10-year period used in the Congressional budget process. This presentation includes some key elements of those projections.
To show how transportation funding is handled in CBO's cost estimates, this slide deck provides a guide to the agency's 2012 estimate of the Moving Ahead for Progress in the 21st Century Act.
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
KI a INESS v spolupráci s ďalšími partnermi organizovali medzinárodnú
konferenciu v rámci Free Market Road Show 2012 na tému Európa na ceste do
nevoľníctva?, ktorá sa konala dňa 27. apríla 2012 v Bratislave. Pozrite si
prezentáciu Daneila Mitchella. Viac informácií na
www.konzervativizmus.sk.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
The new type of smart, sustainable entrepreneurship and the next day | Europe...
The Latvian Economy, No 3, 29 April 2011
1. The Latvian Economy
Monthly newsletter from Swedbank’s Economic Research Department
by Dainis Stikuts and Lija Strašuna No. 3 • 29 April 2011
Fiscal policy – still room for improvement
• Despite tax increases, the ratio of tax revenues to GDP has decreased in the last two
years. The ability to tax the economy and the effectiveness of tax collection have
diminished, implying that further consolidation measures should be based on well-
thought-through expenditure cuts and rebalancing tax burden.
• Although the government budget deficit last year was below the cap set by the
agreement with the IMF/EC, with more precise planning and stricter fiscal discipline
the outcome might have been better. The fiscal discipline law that defines
countercyclical budget rules is now in the parliament, but its approval is pending.
• The effectiveness of the public sector depends on the politicians’ will to initiate
reforms, as well as civil servants’ ability to provide them with qualitative proposals
and implement these proposals. A performance-based remuneration system in the
public sector linked to private sector wage developments would help to improve the
qualification and motivation of public sector employees.
The government budget situation is improving faster temporary measures (e.g., reducing payments to
than expected. The general government budget the second pension pillar, forcing dividend payouts
deficit for 2010 was 7.6% of GDP 1 (which is below from state-owned companies) and it has increased
the 8.5% cap set in agreements with the IMF/EC). taxes (including those on labour income).
In 2011, the government intends to reduce the
budget deficit faster than initially planned. In April, Tax revenues
the parliament passed a supplementary budget,
40
and the central government budget deficit has been Av erage Jan.2010: RE ↑ Jan.2011:
2004-2006 Excise ↑
reduced to 4.2% from 5.4% of GDP (cash-flow Excise↑ PIT ↑ Jul.2010:
RE ↑ VAT ↑
basis). During 2009-2011, the government has 35 Transport ↑ Excise ↑
PIT↓ Soc ↑
done much hard work to consolidate the budget by Transport ↑
about LVL 2 billion, or 15% of GDP. The target is to 30
put the economy and the budget on a sustainable
?
path, to fulfil the Maastricht criteria and introduce 25
the euro in 2014. Jan.2009: PIT ↓
Excise ↑ VAT ↑ Jul.2011:
20
The progress achieved so far has been reflected in RE ↑ Transport ↑ VAT↑
higher Latvian sovereign credit ratings. It provides Excise↑
the opportunity for the Latvian government to start 15
issuing bonds in international financial markets for a 1Q07 1Q08 1Q09 1Q10
more acceptable price and gradually to begin % of GDP % of domestic demand
Sources: CSBL, State Rev enue Serv ice
refinancing external debt. However, this does not
mean that public finances already stand on solid
grounds. In each subsequent budgeting round, fiscal
consolidation increasingly moved towards tax
Further increase in tax burden is not increases rather than expenditure cuts. While in
effective 2009 about. 70% of the consolidation measures
were on the expenditure side, in 2010 this share
So far, the government has undertaken the easiest, decreased to 42% and in 2011 it will fall to 31%.
least painful approach, i.e., instead of well-thought- This is in contrast with pre-election promises and
through structural reforms it has employed several empirical evidence, which suggests that
consolidation done through expenditure cuts has a
1
Accrual basis, i.e. according to Maastricht criterion.
Economic Research Department. Swedbank AB. SE-105 34 Stockholm. Phone +46 8 5859 1000.
E-mail: ek.sekr@swedbank.com www.swedbank.com
Legally responsible publisher: Cecilia Hermansson, +46 8 5859 7720.
Mārtiņš Kazāks, +371 6744 5859. Lija Strašuna, +371 6744 5875. Dainis Stikuts, +371 6744 5844.
2. The Latvian Economy
Monthly newsletter from Swedbank’s Economic Research Department, continued
No. 3 • 29 April 2011
less negative impact on GDP and employment than Tax share in total tax revenues in 2010
tax-based adjustments. 2
The tax burden has increased in 2009-2011 – the Social
government has raised tax rates and widened the contrib.
tax base; e.g., it has started to tax residential real 34%
estate and capital income. Despite tax increases,
Personal
the ratio of tax revenues to GDP has declined. This
income tax Excise
can partly be explained by the expansion of
23% 14%
exporting sectors, which are less tax intensive;
however, tax revenues as a percent of domestic
demand have diminished as well. This thus
indicates problems with tax evasion, implying that a VAT 24%
further tax increase is not efficient (not least, other 5%
because trust in government policy and the
incentive to pay taxes are falling). Source: State Treasury
Reducing the shadow economy does remain one of
the government’s key areas of focus. However, the Now, there is less room for manoeuvre due to the
raising of taxes has in fact done the opposite, while planned euro introduction in 2014 to balance a
appropriate actions to improve tax administration trade-off between curbing inflation and reducing the
and collection so far have been weak and slow in budget deficit. The option of decreasing the tax
coming. Government credibility – and thus burden on wages (possibly compensating for this
motivation to pay taxes – has been undermined by with higher property taxes and abolishment of the
frequent and unpredictable tax changes, which in reduced value-added tax, along with an effective
many cases have been in contrast to long-term compensation mechanism for the less well off)
policy documents, e.g., “The Framework for Tax should be considered in the nearest future.
3
and Duty System for 2011-2015.”
Fiscal discipline and budget planning need
Despite an increase in consumption and property to be improved
taxes, Latvia’s current tax system is still not well
balanced – the motivation to pay taxes and the The recent recession shed light on a couple of
economic structure remain distorted. 4 There is a issues of fiscal discipline and budget planning that
heavy tax burden on wage income (personal prevented the actual budget deficit outcome from
income tax 25% and employer and employee social being better.
contributions 35.09%), which is subject to larger tax
evasion than property or consumption taxes; First, the deficit in the last couple of months of the
together with the large labour tax wedge, this year usually increases by 2-3 percentage points of
GDP due to the seasonal pattern of expenditures.
burden discourages job creation. 5 Unfortunately,
The question is whether this is a reflection of
the opportunity to pursue reforms – perhaps painful
specific payment terms for public orders made
in the short term, but promoting medium-term
during the current year or public institutions’
growth – during the post-election period in late 2010
wanting by all means to spend the whole funding
and early 2011 was by and large wasted.
planned for the year, thereby proving the validity of
their budgets and avoiding possible financing cuts
next year. Budget expenditures at the end of the
2
year regularly erode the improvement in the budget
See, e.g., IMF (2010), “Will it hurt? Macroeconomic effects balance achieved during the year (e.g., due to
of fiscal consolidation”, World Economic Outlook, October larger-than-expected revenues) and raise the issue
2010, Chapter 3.
3
See
of fiscal discipline.
http://www.fm.gov.lv/?lat/valsts_budzets/videja_termina_budz
eta_planosana (in Latvian)
4
For more details, see Swedbank Analysis (2009), “The fiscal
stance in Latvia – how to return to a sustainable path?”,
October 30, 2009.
5
Although tax revenues from labour income as a percent of
GDP in Latvia are lower than in the EU27 on average (14.5%
vs. 19.7% in 2008, possibly due to tax evasion), the labour tax
wedge is larger than in the EU27 on average (40% vs. 37%;
Eurostat data).
2 (4)
3. The Latvian Economy
Monthly newsletter from Swedbank’s Economic Research Department, continued
No. 3 • 29 April 2011
Accumulated general budget deficit, % of GDP of public finances; this proved to be quite efficient. 6
The framework includes central government
4
expenditure ceilings for the next three years, a
2
balanced budget requirement for local
governments, and a budget surplus target over the
0 business cycle for the general government. It
should be emphasized that such a medium-term
-2 framework has to be integrated into all aspects of
the budget process in order to be effective
-4 (including forecasting capacity).
-6 The Latvian government has taken the first steps in
this direction. The Ministry of Finance has prepared
-8
a fiscal discipline draft law that requires the
Jan Mar May Jul Sep Nov
government to make mid-term budget planning and
2007 2008 2009 2010 2011
defines countercyclical budget rules, starting in
* cash-f low basis Source: State Treasury 2012. This draft law has been approved by the
Cabinet of Ministers and is now pending in the
Second, during the last two years, an increase in parliament. It includes expenditure ceilings, requires
planned expenditures in the second half of the year the budget to be in surplus when the economy is
has become quite regular, for instance, the growing faster than 2%, and allows a budget deficit,
announcement of funding shortages and requests not to exceed 3% of GDP when the economy is
7
for additional financing in the health care sector in growing slower or decreasing. However, to make
autumn. Even taking into account the fact that not this law effective it is also crucial to enhance the
all expenditures can be forecasted at the beginning capacity to make realistic and reliable forecasts for
of the year, such regularity points to problems in macroeconomic parameters and revenue and
budget planning. Otherwise, it is hard to explain the expenditure development.
difference between the initial budget plan approved
at the beginning of the year and the revised plan in Still room for improvement in public sector
December. For instance, the planned budget deficit effectiveness
nearly doubled in 2010 from LVL 524 million in
January to almost LVL 1000 million in December. Taking into account the fact that further tax hikes
are not reasonable and consolidation should be
Central government budget balance planning, million achieved through expenditure cuts and a
LVL rebalancing of the tax burden, the issue of
effectiveness of the public sector takes centre
200
stage.
0
The effectiveness of the public sector depends on
-200
the politicians’ will to initiate reforms, as well as civil
-400 servants’ ability to provide them with, and to
implement, qualitative proposals. To ensure quality
-600
decision making, the question of remuneration is
-800 crucial – in many cases, civil servants in key
-1000 Budget positions are grossly underpaid compared with
amendments positions with similar responsibilities in the private
-1200 sector. Gross real wages in public administration
Jan.08 Jan.09 Jan.10 Jan.11 have decreased by about 30% from the peak in the
Budget plan Outcome first half of 2008. This diminishes the motivation of
* cash-f low basis
civil servants and increases the risk of poor policy
Source: State Treasury
decisions.
These problems are not new, and Latvia can learn
how to deal with them from other countries’
experience. For instance, Sweden developed a 6
Ljungman, G. (2007) „The Medium-term Fiscal Framework
medium-term fiscal policy framework in the mid- in Sweden”, OECD Journal on Budgeting No. 3 (6)
1990s to ensure the transparency and sustainability 7
This law would also be in line with the EC directive on
requirements for budgetary frameworks of the Member States,
planned to be in force in 2014.
3 (4)
4. The Latvian Economy
Monthly newsletter from Swedbank’s Economic Research Department, continued
No. 3 • 29 April 2011
With this recommendation, we do not encourage If the public sector (including not only public
across-the-board linear wage increases in the administration, but also education, health care, and
public sector, especially taking into account further defence) is made more effective and productive,
fiscal consolidation – a possible solution is the thereby reducing expenditures, there is an
introduction of a performance-based remuneration opportunity to increase wages for qualified people
system in the public sector, which should be linked working there. There has been an optimisation in
to private sector wage developments. the work of the public sector; e.g., the share of
employment in public administration decreased
Employment in public administration in 2010, % of from 7.3% of total in 2009 to 6.6% in 2010.
total employment However, there is still room to improve cost-
Finland efficiency. 8 By delaying reforms that improve the
Romania remuneration system and effectiveness in the public
Ireland sector, there is a risk of losing qualified employees,
Denmark
Sw eden which, in turn, would endanger quality policy
Lithuania decisions and their implementation.
Slovenia EU
Italy
Portugal average
Netherlands
United Kingdom
Poland
Latvia '10 Dainis Stikuts
Czech
Austria Lija Strašuna
Estonia
Germany
Latvia '09
Bulgaria
Cyprus
Hungary
Slovakia
Greece
Malta
Belgium
France
Luxembourg
0 3 6 9 12
Source: Eurostat
9
Research by, e.g., the Bank of Latvia shows that cost
efficiency in Latvian education, health care, and social security
sectors is still way below the EU average; for more details, see
http://www.bank.lv/publikacijas/latvijas-valdibas-izdevumu-
efektivitate/6107 (in Latvian)
Swedbank
Economic Research Department
Swedbank AB. SE-105 34 Stockholm. Swedbank’s monthly newsletter is published as a service to our customers. We believe that
we have used reliable sources and methods in the preparation of the analyses reported in
Legally responsible publisher this publication. However, we cannot guarantee the accuracy or completeness of the report
Cecilia Hermansson, +46 8 5859 7720 and cannot be held responsible for any error or omission in the underlying material or its
8
Research by, e.g., the Bank of Latvia shows that cost
use. Readers are encouraged to base any (investment) decisions on other material as well.
Neither Swedbank nor its employees may be held responsible for and social security
efficiency in Latvian education, health care, losses or damages,
Martiņš Kazāks, +371 6744 5859 direct or indirect, owing to sectors is stillomissions inthe EU average; for more details, see
any errors or way below Swedbank’s monthly newsletter.
Dainis Stikuts, +371 6744 5844 http://www.bank.lv/publikacijas/latvijas-valdibas-izdevumu-
Lija Strašuna, +371 6744 5875 efektivitate/6107 (in Latvian)
4 (4)