The Ministry of Health reports that for the first time ever a special study was ordered: to assess the financial losses caused by alcohol consumption to the state budget in the health, economic and social spheres, as well as the benefits of preventive measures.
Direct costs are estimated at EUR 149.7 million or 0.45% of GDP. Direct and indirect costs from alcohol consumption to the state budget and economy are estimated at EUR 439.9 million to EUR 602.2 million or 1.3% to 1.8% of GDP. The study itself for 2021 was performed by Baltic International Centre for Economic Policy Studies following the order from the Ministry of Health.
This includes losses of EUR 56.6 million to healthcare – or 2.7% of all expenditures for the healthcare sector.
“Alcohol consumption is a notable contributing factor for both various illnesses and premature deaths. Alcohol consumption
is related to more than 200 illnesses and diagnoses,
including liver diseases, injuries, malignancies, as well as diseases of the heart and circulatory system. To ensure consumption of alcoholic beverages goes down among residents, it is important to adopt various complex measures simultaneously.
They have to include both legislative initiatives to create the necessary conditions and encourage residents to change their habits and continue educating society to improve public health literacy,” said Minister of Health Hosams Abu Meri in a press statement.
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The direct costs of alcohol consumption of EUR 149.7 million were observed in 2021, with the health sector spending EUR 56.6 million; law enforcement spending EUR 47.7 million, or 6.5% of general government spending directed to ensuring public order and safety. For social assistance, these problems required EUR 44.8 million or 0.97% of state and local government expenditure for the provision of social services, social care centres, orphan’s courts, child specialized care institutions and out-of-family care services.
The financial influence on unemployment levels and lower economic activity or indirect damages are estimated at EUR 290 million to EUR 452 million or 0.9%-1.3% of GDP because the consumption of alcohol causes persons to either die, lose their job, go to prison, or get sick with the consequence of lost working ability or lower productivity.
The ministry stressed in the statement that the damages caused by alcohol consumption
Latvian residents lost up to 88 620 hours of life in 2021
that could have been lived in good health and good quality of life for both the one consuming alcohol and his or her relatives.
According to the Ministry’s estimates, the biggest impact on the state budget and costs would be a reduction in alcohol sales time, especially in the evening hours, an increase in the age limit for purchasing alcohol up to 20 years, an increase in the excise duty rate, a reduction in the blood alcohol concentration of drivers and a restriction on alcohol advertising.
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