“We don’t have that kind of money!” Kulbergs gives a grim diagnosis of Latvia’s economy

After the elections, the current and future Prime Minister Andris Kulbergs privately acquainted potential partners for the future government with the real situation regarding the country’s budget. And now it is time for the rest of the Latvians to learn about the financial condition of the country. Today, at a specially convened press conference, Kulbergs extensively showed journalists graphs that clearly indicated one thing - the banquet at someone else's expense is coming to an end, and soon it will be necessary to pay the bills, and most importantly - tighten belts, as soon loans will either not be available or will be offered under conditions that are unmanageable for the Latvian economy. So, the external debt already exceeds 20 billion euros, and we are preparing to borrow more, which means that by 2029 the external debt will reach 54% of GDP! Kulbergs emphasized that the sharp rise in public debt began during the COVID period, that is, from 2020, when the economy effectively came to a halt for well-known reasons and it was necessary to pay benefits and subsidies, including within the framework of, as we remember, the so-called “helicopter money.” COVID, of course, also affected our neighbors, but they managed their existing financial resources more wisely and effectively. As a result, we are now lagging behind Estonia and, especially, Lithuania in all indicators - both in real economic growth, and in the number of jobs and employment, and in labor productivity, and in budget revenues... Yes, Latvia's GDP growth over the past 10 years is impressive - 69 percent! However, it has mainly been achieved due to the high cost of living. The real growth is only 15 percent. Moreover, this growth has brought the treasury only 3.8 billion euros. Kulbergs' brief conclusion at the press conference: we cannot continue living like this! We need to stop accumulating debts, it is time to start working more efficiently, change the employment system and... we will have to tighten our belts - the Prime Minister stated that already in preparing the budget for the next year, it is necessary to find a way to reduce revenues by 600 million! Otherwise, it will not be possible to finance the expenses that were approved by previous governments, including the pre-election government of Kulbergs himself.