Oct 2 (Reuters) - Latvian Prime Minister Valdis Dombrovskis has won Saturday's election and can form a new majority coalition, partial results showed, after he led the small Baltic state through the European Union's worst recession. [ID:nLDE69106Q]
Under Dombrovskis, Latvia in 2009 carried out spending cuts and tax rises equal to 11 percent of gross domestic product (GDP) and aims to keep its budget deficit this year at 8.5 percent of GDP.
Further austerity measures are aimed at:
* Reducing the budget deficit to 6 percent of GDP in 2011 and to 3 percent of GDP in 2012
* The government and central bank hope such measures will allow Latvia to qualify for euro entry in 2014
* The central bank says the government's 2011 budget should aim to cut the budget deficit by 400 million lats ($769.8 million). The Finance Ministry has said the amount could be between 350 and 395 million lats.
* The government has said one third of the savings will come from tax rises and two thirds from spending cuts, including by government ministries.
* More revenue from value added tax is expected to be one of the ways the government raises more funds, possibly by removing reduced rates applied to some goods.