Last year, Latvia’s state budget, according to estimates calculated using European System of Accounts, had a deficit of EUR 893.1 million or 2.3% of GDP, according to the latest data published by the Central Statistical Bureau of Latvia (CSP).
Compared to 2022, the general government budget deficit went down by EUR 885.7 million in 2023.
In turn, the general government’s consolidated gross debt last year amounted to EUR 17.581 billion or 43.6% of GDP. The general government consolidated gross debt increased by EUR 1.543 billion or 9.6% in 2023 compared to 2022. The increase in the general government debt in 2023 was influenced by the issuance of three new Eurobonds.
CSP notes that in 2023, general government sector expenditure, compared to 2022, increased by 5.2% and amounted to EUR 16.5 billion, of which EUR 400 million accounted for expenditure on support measures to compensate for the increase in energy prices, while revenue increased by 12.3% and amounted to EUR 15.6 billion.
Compared to the operational data from the State Treasury, which showed a state consolidated general budget deficit of EUR 1.4 billion for 2023, the budget deficit Central Statistical Bureau’s calculated using European System of Accounts 2010 is EUR 529.8 million or 1.3 percentage points of GDP lower.
The most significant methodological adjustments with a positive impact on the general government budget reducing the budget deficit were the correction of claims against debtors – EUR 382.7 million or 0.9% of GDP, the adjustment to balance the flow of foreign financial assistance – EUR 298.9 million or 0.7% of GDP, the adjustment of the Recovery and Resilience Facility and the Modernisation Fund – EUR 147.7 million or 0.4% of GDP, adjustment of the Recovery and Resilience Facility and the Modernisation Fund – EUR 147.7 million or 0.4% of GDP, for the adjustment of interest receivable – EUR 39.7 million or 0.1% of GDP, for the adjustment of undistributed contributions to the single tax account – EUR 38.8 million or 0.1% of GDP, as well as for the balance of the Deposit Guarantee Fund – EUR 26.7 million or 0.1% of GDP.
At the same time, adjustments with a negative impact on the general government budget have also been made, which increases the budget deficit. Of these, the most significant are the balance sheet of state and municipal capital companies reclassified to the general government sector – EUR 147.2 million or 0.4% of GDP, the adjustment of liabilities to creditors – EUR 77.8 million or 0.2% of GDP, the adjustment between accrued and paid interest – EUR 64.3 million or 0.2% of GDP, correction for the inclusion of Latvijas dzelzceļš in the general government sector – 43 million euros or 0.1% of GDP, correction for the future costs of the second pillar pension scheme funds – EUR 29.4 million or 0.1% of GDP, tax adjustments using the time-shifting method – EUR 14.1 million or 0.03% of GDP, correction for the implementation of the programs of the Development Financial Institution Altum – EUR 9.1 million or 0.02% of GDP, as well as the adjustment of the revenue from the auctioning of emission allowances allocated to Latvia – EUR 6.5 million or 0.02% of GDP.A year earlier – in 2022 – the Latvian state budget, calculated in accordance with the ESA 2010 methodology, had a deficit of EUR 1.779 billion or 4.6% of GDP, in 2021 – EUR 2.396 billion or 7.2% of GDP, and in 2020 – EUR 1.318 billion or 4.4% of GDP.
Latvia’s state budget deficit at 2.3% of GDP in 2023
