Outgoing Latvian Deputies Boost 2002 Expenditures

In its final session on 31 October, the 1998-2002 parliament passed 40 bills, including amendments to the 2002 budget act. The budget amendments - approved by a vote of 74 to zero, with eight abstentions - provide an additional 19.7 million lats ($32 million) in spending -- including state guarantees to drug makers Olainfarm (6.8 million lats) and Silvanols (350,000 lats), compensation to cattle breeders for drought damage (5.92 million lats), wage hikes in the medical sector (1.7 million lats), and the implementation of a Welfare Ministry-backed law on transition conditions for social assistance (1.3 million lats). Outgoing Finance Minister Gunars Berzins said that, even with the additional expenditures, the fiscal deficit for 2002 will not exceed 1.8 percent of GDP due to improved tax collection. But Valdis Dombrovskis, the likely nominee for finance minister in the new cabinet, foresees a deficit of 2.87 percent of GDP.