Riga  - The prime minister of the cash-strapped Baltic state of Latvia said Wednesday assets in public ownership could be sold to raise funds as work continues on finding extra cash for the country's 2010 budget.

Speaking after a meeting with President Valdis Zatlers, Prime Minister Valdis Dombrovskis would only name nationalised bank Parex as a company that was definitely for sale but did not rule out the possibility that other assets could be privatised.

"What matters is whether in the current financial situation we can find investors willing to offer reasonable prices for such companies," Dombrovskis said.

"It would only be a source of funds to finance the budget deficit but it would not make talks with international lenders easier," he said, according to the Baltic News Service.

Latvia has agreed a 7.5-billion-euro economic bail-out package that includes contributions from the International Monetary Fund, European Union, World Bank and regional governments after a decade-long boom turned into a deep recession.

The government needs to introduce tough structural reforms and spending cuts to continue receiving payments from lenders but Dombrovskis' five-party coalition has so far been unable to agree on how to find extra cash since agreeing 1 billion dollars' worth of cuts in June.

The 2010 budget is due to be sent to the Latvian parliament for approval in late October.

Pension payments and wages have been reduced, and the unemployment rate has climbed to 17 per cent from 6 per cent a year ago. The Latvian economy contracted
19.6 per cent year-on-year in the second quarter of 2009, with the figure for the year as a whole expected to be similar.

Dombrovskis's comments came hours after official figures showed Latvian retail sales plunged by more than 30 per cent year-on-year in August.

Possible privatisation targets could include national airline airBaltic, in which the state owns as majority stake, and telecoms companies Lattelecom and LMT which are part owned by Swedish group TeliaSonera, which has previously tried to gain full ownership.

Earlier this month TeliaSonera announced deals to buy out state-owned stakes in telecoms companies in neighbouring Estonia and Lithuania.  dpa