SEB: Macroeconomic Review Of Latvia

SEB has published the April issue of "Macroeconomic Review of Latvia". It is definitely worth reading the full report, but here I list the headlines:

• Government agrees to cut the budget expenditure by 40% compared with 2008 which still means budget deficit of at least 7% of GDP.
• In February there was a surplus of 0.7 million lats in the Current Payment Account of the Balance of Payments.
• Tax revenues as at 19 April 2009 amounted to 565 million lats or 12.8% below the target.
• Moodyʹs has downgraded the government ratings for Latvia for liabilities in foreign and local currency from Baa1 to Baa3.
• In 2008 the annual budget deficit was 4% of GDP. The main precondition for introduction of the euro will depend on the government’s ability to straighten out the budgetary expnditure according to Maastricht criteria.
• The transit industry feels little influence of recession and shows only a slight drop in the first quarter.
• The rocketing provisions for doubtful loans turned the bank‘s profit in the 1st quarter into loss

At least the current payment account posted a surplus ...