tag:blogger.com,1999:blog-2873748063007712173.post4593922983391439904..comments2010-02-14T12:44:58.216+01:00Comments on Latvia Economy Watch: Latvia Has Budget Surplus in Q1 2008Unknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2873748063007712173.post-24481335997058944862008-04-09T21:11:00.000+02:002008-04-09T21:11:00.000+02:00Hi Jekabs,"Edward, would you think it would be an ...Hi Jekabs,<BR/><BR/>"Edward, would you think it would be an advisable move to run a deficit budget sooner rather than later in order to fuel Aggregate Demand avoid the "hard landing"?"<BR/><BR/>Yes I do. This is a very difficult question to call, but looking at the speed of deceleration, and imagining that there is at least a 6 month lag before fiscal packages have an effect, I think it would be wise to be changing course now.<BR/><BR/>The big difficulty is the continuing inflation, but people need to be very careful about this, since if the thing loses sufficient velocity inflation can just as quickly turn into deflation, even though this looks to be ridiculous at this moment in time.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-2873748063007712173.post-79503327437358409792008-04-09T20:56:00.000+02:002008-04-09T20:56:00.000+02:00Edward, would you think it would be an advisable m...Edward, would you think it would be an advisable move to run a deficit budget sooner rather than later in order to fuel Aggregate Demand avoid the "hard landing"? Without sufficient monetary policy independence, the fiscal policy options may be the only ones the government has for stabilizing the economy.Jekabs Bikishttps://www.blogger.com/profile/06293099886253022074noreply@blogger.comtag:blogger.com,1999:blog-2873748063007712173.post-72632826595038750762008-04-05T15:25:00.000+02:002008-04-05T15:25:00.000+02:00There's a detailed breakdown by type of tax (unfor...There's a detailed breakdown by type of tax (unfortunately, in Latvian only) <A HREF="http://www.vid.gov.lv/default.aspx?tabid=11&id=3329&hl%20=1" REL="nofollow"> here</A> and it looks strange to me. <BR/><BR/>On one hand, there's 34% y-o-y increase in social security contributions and 28% in personal income tax, both of which are way above the plan. On the other hand, VAT is growing by 8-10% y-o-y, which is substantially below the plan and that does not look like a good sign to me. (The plan was around 20% revenue increase for all of those taxes.)Latvian abroadhttps://www.blogger.com/profile/07206431082954964671noreply@blogger.com