The budget deficit for 2023 is planned to be around 3.3% of GDP. The state debt is planned to be 43% of GDP, according to the Latvian general government budget plan project approved by the Cabinet of Ministers and submitted to the European Commission.
In accordance with European Union Stability and Growth Pact, EU member states are required to submit to the European Commission and Eurogroup their general government budget plans by 15 October of every year.
This time, unlike previous years, the Ministry of Finance prepared the general government budget project for 2023 based on the ministry’s updated macroeconomic scenario and fiscal forecasts.
Plans are based on a stable political scenario – based on the fiscal influence of all political decisions made thus far and excluding potential decisions that could be made by the next Cabinet of Ministers during the development of the 2023 budget.
Fiscal forecasts are based on data from the State Treasury regarding completion of the consolidated general budget in the first seven months of 2022, as well as tax and non-tax revenue forecast, state base budget and state special budget medium-term expenditures and the government’s decisions made by 27 September.
This year’s general government revenue is expected at 35.7% of GDP, expenditures are planned at 42.7%, deficit is expected ad 7%, and debt at 42% of GDP.
In the event of an unstable policy next year the general government revenue is expected at 36.1% of GDP, expenditures are expected at 39.4%, deficit – at 3.3%, and state debt – 43% of GDP next year.
Once the new government has been composed, work can commence on the state budget 2023. A general government budget plan will be prepared and submitted to the European Commission and Eurogroup.
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Latvia’s budget deficit planned at 3.3% of GDP next year
