The story about economic growth is not in any way related to the work performed by Prime Minister Maris Kucinskis. Economic growth is based on money provided by European structural funds in previous planning period, says chairman of New Conservative Party and prime minister candidate Janis Bordans.
“It is claimed that Kucinskis’ government has made a number of accomplishments. The economy now has a much larger volume of funding circulating when compared to the previous period,” explains Bordans.
The politician sees a very large risk in the current situation. He says that the situation is very similar to the one observed during the 2008 economic crisis.
“Once again we see organization of mega-projects, such as electrification of Latvia’s railway, which will turn out useless in the end, but billions of euros will have been pumped into it by then. To realize European funding, the government organizes massive construction projects of questionable need. This is considered as an economic accomplishment,” he said.
He says there are also doubts about structural reforms associated with taxes.
“The ones working in the business environment see no benefits from the tax reform. Accounting has turned into a nightmare. I doubt residents would benefit from differentiated income tax, because a large portion of that amount will be “eaten away” by increased prices caused by more expensive fuel. In the end, most residents will have to undergo tax recalculation. It is entirely possible that the tax reform may turn out to be a colossal failure that was realized with one goal in mind – to increase the budget prior to elections without giving a thought to possible long-term consequences,” says Bordans. (BNN/Business World Magazine)
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