Riga - Latvian Prime Minister Valdis Dombrovskis said Monday he was optimistic about the chances of his country securing the next tranche of a 7.5-billion-euro
(10-billion-dollar) aid package from international lenders.

He was speaking to reporters as representatives of the European Commission and the International Monetary Fund (IMF) began to assess wide-ranging fiscal and structural reforms introduced by his coalition government.

Dombrovskis said he was confident that an amended budget recently approved by Parliament would provide "a good basis for further disbursements from the international loan."

The European Commision has already said that a 1.2-billion-euro payment will be made by the end of July, but the IMF has yet to decide whether it will release a
200-million-euro payment. A previous payment of the same amount was withheld after the IMF decided reforms were not happening fast enough.

Latvia was forced to ask for help from a range of international lenders in late 2008 when its economy went into a dramatic recession after a decade-long boom fuelled by cheap credit.

The economy is expected to contract by at least 18 per cent in 2009 and unemployment has risen to around 15 per cent.

In an effort to balance the books to satisfy lenders, Dombrovskis has introduced hard-hitting austerity measures, including tax hikes and big public sector wage and spending cuts.

But despite the pain, he retains some public support for the even- handed way in which he has applied the cuts.

Last week the head of Dombrovskis' office resigned rather than accept a 35-per-cent wage cut.(dpa)