(5) | Based on data provided by the Commission (Eurostat), in accordance with Article 14 of Regulation (EC) No 479/2009, following the notification by Latvia before 1 April 2013 and on the Commission services 2013 spring forecast, the following conclusions are justified:
— | Following high general government deficits in 2009 and 2010 (respectively at 9,8 % and 8,1 % of GDP), which partly reflected measures to stabilise the financial sector, the deficit started rapidly declining in 2011, when it reached 3,6 % of GDP. This improvement reflected sizeable and broad-based fiscal consolidation implemented over the period of 2009-2011 in the context of the economic adjustment programme supported by the balance-of-payments assistance, as well as improving cyclical conditions; the adjustment programme was successfully completed in January 2012. In 2012, the general government deficit declined further to 1,2 % of GDP, thus overachieving the deficit target of 2,1 % of GDP set in the Convergence Programme for 2012 to 2016 and well below the 3 %-of-GDP Treaty reference value. On the revenue side, this reflected favourable cyclical conditions and improving tax efficiency, while expenditure growth remained substantially below the nominal GDP growth. As a result, in 2012, the share of government revenue in GDP increased by ¼ percentage points, while the share of government expenditure declined by 2 percentage points. |
— | The Convergence Programme for 2012 to 2016 envisages that the headline deficit will be 1,1 % of GDP in 2013, stabilising thereafter at the level of 0,9 % of GDP until 2016. The Commission services 2013 spring forecast projects that the general government deficit will remain broadly unchanged in 2013 at 1,2 % of GDP and will decrease to 0,9 % of GDP in 2014, thus staying well below the reference value of 3 % of GDP. |
— | The general government debt stood at 40,7 % of GDP in 2012. The Commission services 2013 spring forecast projects the general government gross debt to increase to 43,2 % of GDP in 2013, as the Government accumulates assets for large debt repayments scheduled for 2014-2015. As these repayments take effect, the debt is expected to decline again to around 40 % of GDP in 2014. |
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